Nintendo Q1 operating profit jumps 151%, beating analyst estimates

Nintendo's net profit surged by more than 50 percent year-on-year in the first quarter, reaching 147.4 billion yen (US$930 million), surpassing analyst estimates by a wide margin. This impressive growth was driven by increased video game sales and a significant windfall from US tariff refunds. The success of "The Super Mario Galaxy Movie" also contributed to the strong performance, although sales of Nintendo's current console, the Switch 2, are slowing down.

Two new games for the Switch 2, "Tomodachi Life: Living the Dream" and "Pokemon Pokopia," received praise for their life-simulation gameplay, which has been described as a calming influence in the stressful modern world. These games sold nearly 8 million copies combined. Despite an overall decline in sales for Nintendo's dedicated video game platform business, 13.1 percent, due to falling Switch 2 sales, the company remains optimistic about its prospects.

It expects to sell 16.5 million units of the Switch 2 in the 2026 to 2027 financial year, a decrease of around 17 percent from the previous year.

Nintendo plans to hike the price of the console, anticipating that the artificial intelligence boom will cause memory chip prices to soar. The company recently announced its intention to remake the beloved 1998 action-adventure classic, "The Legend of Zelda: Ocarina of Time," for the Switch 2. This highly anticipated game has received a 99 percent score on review aggregation site Metacritic.

Analysts at UBS expressed enthusiasm for the 2026 titles like the Zelda remake, which they believe will draw attention to the Switch 2. However, they noted that the pipeline still lacks a clear blockbuster title to significantly boost Switch 2 adoption, with exclusive content likely to expand more meaningfully from 2027.