Nintendo profit falls 55% as sales of its ageing Switch console plunge

Nintendo on Friday reported revenue and profit that plunged in the company’s fiscal first quarter, as sales of the ageing Switch console decline.

Here’s how Nintendo did in its fiscal first quarter ended June 30. versus LSEG estimates:

• Revenue:  246.6 billion Japanese yen ($1.65 billion) versus 289.61 billion yen expected.
• Net profit:  80.9 billion Japanese yen versus 70.73 billion yen expected.

Net sales lost 46.5% year-on-year, while net profit fell 55.3%.

Nintendo sold 2.1 million units of its flagship Switch consoles, down 46% on the year.

Investors are looking out for news surrounding a successor to the Nintendo Switch console to reinvigorate its gaming business. The company previously said that the next-in-line device will be announced in the current fiscal year, which ends in March 2025.

Nintendo also previously said that it expects to sell 13.5 million units of the existing Switch console model in this period. The company stuck to that forecast on Friday.

The Switch is now more than seven years old and is the company’s second-most successful console by unit sales, after the Nintendo DS. Throughout its lifetime, Nintendo has revamped the Switch with a better display and ridden the wave of popularity of games featuring well-known characters like Mario and Zelda, which helped sustain sales in the long term.

That effect appears to have faded. Nintendo did not release any blockbuster games in the June quarter, while the company’s software sales fell 41% year-on-year to 30.64 million units.

The Japanese gaming giant has announced a string of games due out in the coming months, featuring well-known characters like Mario and Donkey Kong.

In the face of slowing console sales, Nintendo has also been trying to license out its intellectual property for use everywhere from movies to theme parks. The company is working on an animated Super Mario movie, which will be produced by Illumination and is scheduled for release in 2026. Nintendo hopes this will continue to attract users to its video games.

Despite this push, sales from the mobile and intellectual property-related part of the business fell 54% year-on-year to 14.7 billion yen.