Nintendo Profit Rises 150% Despite Switch 2 Sales Drop
Nintendo maintained its Switch 2 forecast as software sales and digital revenue offset weaker hardware demand.
BYProbaho Santra
08 AUG 2026, 01:02 PM
Highlights
- Lower Switch 2 hardware sales did not prevent Nintendo’s Q1 operating profit from rising 150.5%.
- Switch 2 software sales grew 9.2%, while digital revenue jumped 90% YoY.
- Nintendo maintained its 16.5M Switch 2 sales forecast, backed by software growth and tariff refunds.
Nintendo posted stronger first-quarter (Q1) profits despite a slowdown in Nintendo Switch 2 hardware sales. The company credited software growth and a $300M USD U.S. tariff refund for the improved earnings, while keeping its full-year hardware forecast unchanged.
Forthe quarter ended June 30, 2026, Nintendo reported net sales of ¥517.8B (~$3.27B), down 9.5% year-on-year (YoY). Operating profit rose 150.5% to ¥142.5B (~$900M). The company stated that the tariff refunds “were primarily borne by the company rather than passed on to consumers through product prices.”
Nintendo Switch 2 Software Offsets Hardware Decline
Nintendo shipped 3.82M Switch 2 consoles during the quarter, down 34.4% from the launch quarter a year earlier. Dedicated gaming revenue also fell 13.1% to ¥483B (~$3.05B), mainly because of lower hardware sales. Even so, Nintendo continues to expect Switch 2 sales to reach 16.5M units for the fiscal year (FY) ending March 2027.
Software remained the bright spot.
Switch 2 software sales increased 9.2% to 9.46M units, while original Switch software sales jumped 38.6% to 33.81M units. Tomodachi Life: Living the Dream sold 7.94M copies during the quarter, while Pokémon Pokopia added 1.27M units. Digital sales also surged 90% to ¥132.7B (~$838M), representing 61.5% of software revenue.
Earlier in 2026, Nintendo raised Switch 2 prices across Japan, the U.S., Canada, and Europe, citing higher component costs and changing market conditions. The company is also seeking dismissal of a proposed U.S. class action over those pricing decisions after receiving tariff refunds.
Beyond gaming, Nintendo’s IP business generated ¥34.8B (~$220M) in revenue, up 107.4% YoY. The increase was driven by the global success of The Super Mario Galaxy Movie, which has surpassed $1B at the worldwide box office. The results confirm that Nintendo’s software and entertainment businesses continue to support growth as Switch 2 enters its second year.
Probaho Santra
Probaho Santra is a content writer at Outlook India with a master’s degree in journalism. Outside work, he enjoys photography, exploring new tech trends, and staying connected with the esports world.
Probaho Santra
Probaho Santra is a content writer at Outlook India with a master’s degree in journalism. Outside work, he enjoys photography, exploring new tech trends, and staying connected with the esports world.
Published At: 08 AUG 2026, 01:02 PM
Tags:Nintendo
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