Nintendo says Q1 net profit jumps more than 50%

Nintendo reported a significant jump in net profit by over 50% in the first quarter, reaching ¥147.4 billion (US$930 million), compared to ¥77.8 billion in the same period last year. The increase was primarily driven by higher video game sales and US tariff refunds, which contributed to the financial success. The company's expectations for the upcoming financial year, 2026-2027, include selling 16.5 million Switch 2 units, a decrease of around 17% from the previous year's figures.

However, unit sales for the Switch 2 are currently slowing, impacting overall sales. The company highlighted the success of two new games for the Switch 2 - "Tomodachi Life: Living the Dream" and "Pokemon Pokopia" - both life-simulation titles that sold nearly eight million copies each, offering a calming experience in today's stressful world.

Despite the increased sales and the depreciated yen, Nintendo's dedicated video game platform business saw a 13.1% decline in overall sales, mainly attributable to the falling Switch 2 sales. Nintendo anticipates raising the Switch 2 price due to the rising costs of memory chips caused by the AI boom. In addition to the "Legend of Zelda: Ocarina of Time" remake, which is set to launch for the Switch 2, the company aims to release more successful titles to maintain momentum in both hardware and software sales.

The firm also revealed plans to remake "The Legend of Zelda: Ocarina of Time" for the Switch 2, a classic game known for its exceptional quality and high Metacritic score. Analysts from UBS have expressed optimism about the potential impact of the Zelda remake and other 2026 titles, but they caution that a clear blockbuster title is still needed to significantly boost Switch 2 adoption, with exclusive content likely to become more prominent in 2027.