Nintendo quarterly net profit drops as Switch 2 unit sales slow

Japanese gaming company Nintendo disclosed a decline in quarterly net profit Thursday, with the Switch 2 console's slower unit sales contributing to the drop. However, the company still projected its annual profit would reach 310 billion yen.

The Nintendo Switch 2 entered the market in 2025 and quickly became the fastest-selling console in the world. Remakes such as the popular The Legend of Zelda: Ocarina of Time have recently generated fan excitement, but analysts are closely monitoring whether this can help revive Switch 2 sales.

In the second quarter of 2026, Nintendo's net profit fell 29% to 73.5 billion yen, falling short of the 82.2 billion yen expected by analysts in a Bloomberg survey. Despite the drop in hardware sales, operating profit surged nearly 50% in the first half, buoyed by strong game sales and a boost from US tariff refunds.

Nintendo sold approximately 6.5 million Switch 2 consoles in the first half, down from 10.4 million the previous year. The company raised the Switch 2 price amid a global AI boom and soaring memory chip prices. Some analysts believe the absence of a major game to drive Switch 2 adoption among gamers has led to sluggish sales.

Nintendo is working to expand its reach by leveraging the Switch hardware base and rich software lineup to boost software sales and maintain engagement. The company's latest Zelda release, Ocarina of Time, has already received critical acclaim and is being rolled out worldwide as part of the game's 40th anniversary.