Nintendo announced on Thursday that its first-quarter net profit surged over 50 percent year-on-year, reaching 147.4 billion yen (approximately US$930 million), significantly exceeding analyst expectations. This growth was driven by robust software sales and a refund related to U.S. tariffs. The company maintained its annual profit forecast of 310 billion yen despite reporting a decline in dedicated video game platform business revenue by 13.1 percent, primarily attributed to reduced Switch 2 sales. The first quarter, spanning April to June, saw Nintendo’s net profit rise by 53.5 percent compared to the same period last year. Analysts had projected a lower figure of 77.8 billion yen, highlighting the surprise element of the results. The company emphasized the success of several key titles, particularly the newly released games for the Switch 2. Among these were Tomodachi Life: Living the Dream, which sold nearly 8 million units, and Pokemon Pokopia, both of which have been praised for their calming gameplay and appeal to a broad audience. The Switch 2, launched in 2025, quickly became the fastest-selling games console globally. However, recent reports indicate that unit sales are beginning to slow. In response, Nintendo announced plans to raise the console’s price, citing rising costs of memory chips due to the artificial intelligence industry’s demand. The company projects selling 16.5 million units during the fiscal years 2026–2027, marking a decrease of approximately 17 percent from the previous cycle. Nintendo also revealed that it will re-release the critically acclaimed 1998 game The Legend of Zelda: Ocarina of Time for the Switch 2. Originally hailed as one of the greatest games ever made, the title holds a 99 percent rating on Metacritic. Analysts at UBS noted that such high-profile releases should attract attention, though they cautioned that the current pipeline lacks a definitive blockbuster capable of significantly boosting Switch 2 adoption. They suggested that exclusive content might gain more traction starting in 2027. In addition to its software achievements, Nintendo highlighted the commercial success of The Super Mario Galaxy Movie, which was released in April. The animated film has become the fourth highest-grossing movie worldwide this year, according to IMDbPro. It serves as a sequel to the 2023 hit Super Mario Galaxy, which itself was based on the iconic Mario franchise. The film features the voices of Jack Black, Chris Pratt, and Anya Taylor-Joy, further enhancing its appeal. While Nintendo continues to focus on its core gaming platforms, it faces challenges in maintaining the momentum of the Switch 2 amid shifting market dynamics. Despite the slowdown in hardware sales, the company remains optimistic about its long-term strategy, aiming to deliver both hardware and software to a wide consumer base. As the gaming landscape evolves, Nintendo’s ability to balance innovation with nostalgia will be crucial in sustaining its position as a leading force in the industry.
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