Nintendo reports rising net profit despite declining sales and slowing Switch 2 sales

Kyoto-based Nintendo Co. reported an 11% improvement in its net profit for the first half of the fiscal year, according to reports from the Associated Press and AFP. For the April-September period, profit rose to 220.9 billion yen ($1.4 billion) from nearly 199 billion yen in the same period a year earlier.

Financial Performance and Sales

Despite the rise in net profit, Nintendo reported a 12% decline in sales during the same six-month period, totaling 966 billion yen. The company noted that "Although sales declined year-on-year due to lower hardware unit sales, operating profit rose" nearly 50 percent in the first six months, which the company attributed to steady game sales and a windfall related to US tariff refunds.

Hardware sales for the Switch 2 console slowed during this period. Nintendo reported selling 6.49 million Switch 2 machines in the first half, a decrease from nearly 10.4 million units sold during the same period the previous year.

Software and Market Factors

Nintendo reported that software titles such as "Star Fox" and "Splatoon Raiders" sold briskly during the period, while "Mario Kart World" remained in demand. The company also noted that digital sales continued to surge, and the popularity of the 2026 animation film "The Super Mario Galaxy Movie" boosted the bottom line.

Nintendo is currently facing challenges related to a computer chip crunch and rising prices. According to the company, the global boom in AI has caused the price of memory chips used in electronics to soar, leading Nintendo to raise the price of the Switch 2 this year.

Sony Earnings Update

In related news, Sony upgraded its annual earnings forecast for the current fiscal year. The firm now expects to earn 1.33 trillion yen for the year ending in March, up from a previous forecast of 1.21 trillion yen issued in July. Sony reported that second-quarter net profit increased 44 percent to 449.6 billion yen, driven by sales in games, music, and films.

Why it matters

• Nintendo's net profit rose 11% to 220.9 billion yen for the first half of the fiscal year.
• Switch 2 unit sales fell to 6.49 million from nearly 10.4 million in the previous year.
• Rising memory chip prices due to the AI boom have contributed to increased hardware costs.
• Sony upgraded its annual earnings forecast to 1.33 trillion yen.

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Sources

• wral.com: Japanese video game company Nintendo reports rising profit, falling sales :: WRAL.com
• finance.yahoo.com: Nintendo quarterly net profit drops as Switch 2 unit sales slow

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.