Nintendo Switch Dominates as Sales Surge Despite Anticipated Switch 2 Release

Nintendo's hardware sales forecast has been revised downward again, with Switch console and game sales falling "below expectations."

Nintendo's dedicated video game console business saw a 31.7% year-on-year drop in revenue for the first nine months of the fiscal year, reaching 895.5 billion yen (approximately $5.7 billion). This decline stems from lower sales of both the Nintendo Switch and its software.

Mobile and IP-related income also experienced a significant decrease, falling 33.9% year-on-year to 49.7 billion yen (approximately $320 million). This is largely attributed to the challenging comparison with the highly successful 2023 release of The Super Mario Bros. Movie.

Consequently, gross profit decreased by 27.3% year-on-year to 565.5 billion yen (approximately $3.6 billion).

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Nintendo has further lowered its financial forecast for the fiscal year ending March 2025, marking the second consecutive downward revision. The company anticipates even lower Nintendo Switch hardware sales, reducing its projection by 1.5 million units to 11 million, and software sales by 10 million to 150 million.

While sales declines were expected for the eight-year-old Switch, the magnitude surpasses Nintendo's initial predictions. Nevertheless, the Switch has achieved remarkable success, exceeding 150 million units sold. While surpassing the PlayStation 2's 160 million sales to become the best-selling console of all time may be unlikely, the Nintendo DS's 154 million sales record is within reach.

Nintendo characterized Switch and software sales in its third quarter (ending December 31, 2024) as "stable, considering the platform's eighth year."

Overall Switch family system sales decreased by 30.6% year-on-year to 9.54 million units. Software sales fell by 24.4% year-on-year to 123.98 million units. However, Nintendo highlighted strong sales of new titles: The Legend of Zelda: Echoes of Wisdom (3.91 million), Super Mario Party Jamboree (6.17 million), Mario Kart 8 Deluxe (5.38 million), and Nintendo Switch Sports (2.63 million) during the quarter. Mario & Luigi: Brothership reached 1.4 million sales.

Super Mario Party Jamboree stands out as a significant success, outpacing sales of previous Mario Party titles within its first 11 weeks of release.

Crucially, the number of active Switch players continues to grow, reaching 129 million annual playing users in 2024. This indicates sustained engagement despite the console's age.

Nintendo acknowledged the year-on-year decline in Switch unit sales but emphasized the console's continued appeal, noting that holiday sales in some weeks surpassed those of the previous year.

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Given the financial report, investors are likely eager for the Nintendo Switch 2's release. Nintendo confirmed upcoming Switch titles: Xenoblade Chronicles X: Definitive Edition (March 20 release) and Pokémon Legends: Z-A and Metroid Prime 4: Beyond (scheduled for 2025).

The Switch 2 was also mentioned, with Nintendo reiterating its planned 2025 release and referencing a previously released introductory video. A dedicated Switch 2 Direct presentation is scheduled for April 2, along with hands-on events globally.