Nintendo Quarterly Profit Falls 29% as Switch 2 Sales Drop and Memory Costs Rise

The Kyoto-based company shipped 2.67 million Switch 2 units in the quarter, down from 3.82 million in the April to June period and about 41% below the 4.54 million it shipped a year earlier, according to its quarterly results published on Thursday. Quarterly operating profit fell 16% to ¥73.9 billion and revenue came in at ¥448.2 billion, both below analyst expectations. Analysts had forecast net profit of about ¥82 billion.

The results show how the AI boom is reaching consumer electronics. Data centre demand for memory chips has pushed up the price of the DRAM and storage that go into phones, laptops and game consoles, and Nintendo has had to absorb those costs or pass them on. Bloomberg said the quarter was hurt by a lack of major new game releases and by rising Switch 2 component costs. Nintendo raised Switch 2 prices in the United States and other markets earlier this year, and the lower shipments followed.

Six months to September

The first-half picture is stronger. Revenue for the six months was ¥966.0 billion, while operating profit rose 49.1% to ¥216.5 billion, according to Nintendo's figures. The company credited solid software sales and refunds of US tariffs imposed under the International Emergency Economic Powers Act, which it had previously booked as cost of sales. The refund, about $300 million, was recorded in the first quarter as a reduction in cost of sales.

Nintendo's digital business brought in ¥249.6 billion over the half, up 60.5%, and income from intellectual property, which includes films and licensing, rose 87.9% to ¥62.7 billion.

Switch 2 shipments for the six months totalled 6.49 million units, down 37.4% from the same period last year, when the console had just launched. Lifetime Switch 2 sales reached 26.35 million units. Software for the new console sold 15.03 million units in the quarter, and Mario Kart World has now sold 16.48 million copies including bundles.

Nintendo held its full-year targets of 16.5 million Switch 2 units and ¥310 billion in net profit for the year ending March 2027, meaning it is counting on about 10 million more units in the second half.

Holiday Line-Up Under Scrutiny

Analysts are questioning whether the holiday release slate is strong enough to close that gap. "Nintendo's only real blockbuster this fiscal year is the Ocarina Of Time remake," Serkan Toto of Kantan Games told CNBC. A Morningstar equity analyst said "investors have cooled on the Switch 2 platform", according to Kotaku, and analysts expect the absence of a Switch 2 version of Grand Theft Auto VI to weigh on holiday sales.

The memory squeeze has been building for a year. In December 2025, Nikkei reported that the price of the 12-gigabyte RAM module used in the Switch 2 had risen 41% during that fiscal year. Nintendo president Shuntaro Furukawa said in February that the company would weigh a price increase carefully against adoption, sales trends, costs and profitability, before it went ahead with one.

Nintendo has not said whether further price changes are planned. Its next results, for the October to December quarter, will show whether the holiday season and the Ocarina of Time remake can bring hardware sales back toward the pace needed to hit its annual target.