Bloomberg: Nintendo’s Profit Decline and Switch 2 Sales Slump Feed Concerns

[Puff]

Nintendo Co. reported a surprise quarterly profit decline, hurt by a dearth of major new game releases and rising Switch 2 component costs.

The Kyoto-based company said operating profit during its second fiscal quarter fell 16% to ¥73.9 billion ($468 million) on a bigger-than-expected 15% decline in sales. Analysts on average had forecast profit to remain unchanged from a year ago. The company stuck to its full-year outlook for 3% profit growth.

The result appears to back up investor concerns that the Switch 2 is already losing momentum in its second year on the market. Nintendo raised hardware prices as component costs surged amid the artificial intelligence boom, while consumers remained selective about buying new games.

“The slowdown has arrived earlier than anticipated,” said Kazunori Ito, director of equity research at Morningstar. “It’s clear that investors have cooled on the Switch 2 platform.”

A visitor plays on a Nintendo Switch 2 gaming console at the Gamescom computer gaming fair in Cologne, Germany, on Aug. 26, 2026.Photographer: Krisztian Bocsi/Bloomberg
Nintendo is heading into a tough holiday season with the Nov. 19 launch of Grand Theft Auto VI, the blockbuster expected to suck up the attention — and spending — of entertainment consumers worldwide.

The company behind Mario released The Legend of Zelda: Ocarina of Time on Thursday, positioning one of its best-known franchises to help drive holiday demand. But the title is a remake of a game first released nearly three decades ago.

In the six months to September, Nintendo sold 6.49 million units of the Switch 2 console, down 37% from a year ago. That compares with the company’s annual sales forecast of 16.5 million units in the year to March. Software sales grew 19%, helped by Tomodachi Life: Living the Dream.

What Bloomberg Intelligence Says​

Nintendo needs a sharp 2H revenue acceleration to reach the implied ¥1.08 trillion target, yet higher component costs mean much of that holiday-driven growth won’t translate into operating profit...The 2H hurdle looks demanding after Switch 2 hardware units missed consensus by 14.5% in 2Q, driving the overall hardware shortfall.

-Nathan Naidu, industry analyst

The battle for users’ attention comes as memory chip price surges eat into profit margins across consumer electronics makers from Apple Inc. to PlayStation maker Sony Group Corp. Nintendo said it’s bracing for an approximately ¥100 billion impact from rising component prices in the year to March, particularly for memory chips, as well as tariffs.

Nintendo’s Shares Lag More Diversified Rival Console Makers’​

The Switch 2 maker is seen as more vulnerable to memory chip price surges

Nintendo raised the US price of the Switch 2 by $50 to $499.99 on Sept. 1, following an earlier increase in Japan. Switch 2 unit sales in the US fell 14% from a year earlier that month, while dollar sales also declined even as overall US video-game hardware sales rose, according to market researcher Circana.

Bloomberg

 

[Johnic]

@heroeskillrats

LMAO

 

[Luffy123]

I saw Japanese twitter talking about it lmao

And comparing the difference to Sonys results

 

[Raonak]

The Internet really is a delusional bubble.

 

[Ryu]

These are poor results for a console that's just over a year old, like the Switch 2.

 

[Yrassinad]

Important to note that this is just investor sentiment - not their actual quarterly results. An argument can be made that they had unrealistic expectations, considering Nintendo hasn't actually changed their forecast for console units this fiscal year. They probably want Nintendo to crank up the price of the console to boost profitability.

These are poor results for a console that's just over a year old, like the Switch 2.

What? Switch 2 is still way ahead of what other consoles were at after 6 quarters on the market. They're 4m ahead of what the PS4 was at at the same point in its lifecycle. It's almost 7m ahead of what the Switch 1 was at after 6 quarters.

 

[heroeskillrats]

"The Switch 2 maker is seen as more vulnerable to memory chip price surges"
lmao

 

[Yrassinad]

"The Switch 2 maker is seen as more vulnerable to memory chip price surges"
lmao

It's true because unlike Sony and Microsoft, gaming is pretty much all Nintendo has outside of some merch and movie sales. So naturally a bear gaming market is going to hit Nintendo harder than the other two who have incomes from markets that are stable or even bull markets.

Plus Nintendo just launched a new piece of hardware while in Sony's case they already have completed the job of establishing an install base of modern hardware that can run pretty much everything the market will be spitting out for the next few years.

 

[Eleczoro]

Important to note that this is just investor sentiment - not their actual quarterly results. An argument can be made that they had unrealistic expectations, considering Nintendo hasn't actually changed their forecast for console units this fiscal year. They probably want Nintendo to crank up the price of the console to boost profitability.



What? Switch 2 is still way ahead of what other consoles were at after 6 quarters on the market. They're 4m ahead of what the PS4 was at at the same point in its lifecycle. It's almost 7m ahead of what the Switch 1 was at after 6 quarters.

These are the actual quarterly results.

 

[Kokoloko]

They will have to drop the price.

Next year they will have there bigger hits with Pokwmon, Ac, Mario etc

Nintendo cant sell At higher prices its not their market

 

[heroeskillrats]

Nintendo cant sell At higher prices its not their market

They've been outselling Playstation, mate. Like all other systems despite higher prices. In USA there was only GBA but that was crazy cheap and had fantastic games so it's tough to beat.

 

[Kokoloko]

They've been outselling Playstation, mate. Like all other systems despite higher prices. In USA there was only GBA but that was crazy cheap and had fantastic games so it's tough to beat.

Switch and Wii are there best selling home consoles.
Both cheaper than competition.

Which of there consoles that sold well was a higher price than competition?

There not gonna get the same results as Switch 1 with these prices. Simple as

In the UK, £280 with a game is cheap for Switch 1 launch, while PS4 was £350.
So it wasnt cheaper, despite you saying its higher, Nintendo is known for lower prices than Xbox and PS consoles.

£420 for a Switch 2 is a bigger price gap alot of casual fans wont pay. Nintendo doesnt normally go this high

 

[voke]

Typical Mochizuki article honestly.

Nintendo is fine.

 

[heroeskillrats]

Which of there consoles that sold well was a higher price than competition?

Switch 2. PS5 was $399. Now NS2 is $500 and it's outselling the competition.

 

[voke]

Switch 2. PS5 was $399. Now NS2 is $500 and it's outselling the competition.

Worldwide im pretty sure the PS5 is outselling the NS2 right now. 6th holiday vs 2nd holiday.

 

[heroeskillrats]

Worldwide im pretty sure the PS5 is outselling the NS2 right now. 6th holiday vs 2nd holiday.

I think you're underestimating Zelda then. I've seen big lines and it's selling out so the demand seems to be there, I think in Europe it was really needed to have a hardcore title that sells in Europe.

 

[voke]

I think you're underestimating Zelda then. I've seen big lines and it's selling out so the demand seems to be there, I think in Europe it was really needed to have a hardcore title that sells in Europe.

It's a 30 year old game being remade. Fans will eat it up but it's not going to sell anywhere near TOTK or BOTW.

It'll probably launch with half the numbers of TOTK so like 5 million in 3 days.

 

[Kokoloko]

Switch 2. PS5 was $399. Now NS2 is $500 and it's outselling the competition.

Yeah Switch 2 is now. Its unknown territory for them, you just said they always do it and win.. and you give an example their latest console while in the gen..

And its not outselling PS5 atm. We're still in the gen so its unknown terrortory, not proof that Nintendo sells well at higher price.

Plus PS has gone up in price too

 

[Kokoloko]

I think you're underestimating Zelda then. I've seen big lines and it's selling out so the demand seems to be there, I think in Europe it was really needed to have a hardcore title that sells in Europe.

And I think you're underestimating GTA6. Switch 2 is not outselling PS5 atm, not noticeably anyway.
And for comparison reasons, its not close to dominating a 6 year old console in PS5, the way Switch 1 was doing alot better against PS4.

Im glad Zelda is doing well, but do you think it will do BOTW numbers?

I think when Nintendo release the new Mario, Pokemon, Mainline Zelda and Animal Crossing is when you will see the big sales. Combined with smaller and medium sized titles.

 

[heroeskillrats]

It's a 30 year old game being remade. Fans will eat it up but it's not going to sell anywhere near TOTK or BOTW.

20m+ is possible. MM remake might only sell 50% of that, 10m lifetime.
It had midnight releases and huge lines, stores selling out of physical copies, number 1 in the eshop in most places I think. Like it's because of NS1 and BOTW/TOTK that Zelda has grown a lot. I think sales for NS2 has lagged a little because MKW and Pokopia wasn't enough for Europe and Nintendo needs that Zelda + 3D Mario + Pokemon boost. Games everybody wants.

Yeah Switch 2 is now. Its unknown territory for them, you just said they always do it and win.. and you give an example their latest console while in the gen..

And its not outselling PS5 atm. We're still in the gen so its unknown terrortory, not proof that Nintendo sells well at higher price.

They had around $400-500 consoles in the ancient beginning, it's an old company. It's not their first time in this price range.
Unusual circumstances. Nintendo had basically a Splatoon spinoff, Pokemon spinoff, Star Fox remake, FEFW, basically a slower year but still great for hardcore gamers. Then Sony has GTA 6. So the fact that Nintendo is not only competing but maybe winning says a lot, Zelda is now up there with the top tier franchises and 2027 isn't gonna have the type of third party misses that 2026 had. There's a lot of people that aren't ready to wake up and smell the roses and they're gonna eat crow. They're honestly brainwashed in the type of way they think. I said it before with TW3 on Switch 1, that outselling the Xbox version shows most people don't care as much about graphics like people on forums think. People just want as many games as possible and that will become a global problem for Sony. Japan was a country they could ignore because they had the West, now everything's in play and Nintendo's isn't gonna take their foot off the gas pedal. They're expanding.

Plus PS has gone up in price too

PS+ has also gone up in price

And I think you're underestimating GTA6. Switch 2 is not outselling PS5 atm, not noticeably anyway.

See above. I'm not underestimating GTA 6, that's a huge factor but that's Rockstar's miss and not on Nintendo.
This year was spinoffs and remakes. An N64 remake competing with the biggest titles and random spinoffs beating Sony's AAA games isn't good for Sony. It's what I always talked about that people have ignored Nintendo's goal was always two things, build up their IPs and gain third party support. Switch 2 is that. They've finally reached the end game. And Sony's not ready for that.

I'm glad Zelda is doing well, but do you think it will do BOTW numbers?

20m+ lifetime. Very few games can do 30m+. That's Mario Kart, Smash, Animal Crossing, Pokemon territory.
Although it's hard to say because the pricing is extremely good now, Nintendo has basically applied their Japanese pricing strategy on a global basis. FEFW is $80 for example but also available for $70. So premium priced because it's niche and Nintendo doesn't care if the franchise doesn't grow too much, at least that's my read.