Nintendo's first-quarter profits dropped by 55% as the Switch console approaches the conclusion of its product lifecycle

In the first quarter of FY2025, Nintendo experienced a notable drop in both sales and net profit, highlighting the challenges the company faces in the eighth year of its Switch console.

The company witnessed declines across its various business segments, primarily due to fewer releases in Q1 2025 compared to the same period last year, which saw the introduction of “The Legend of Zelda: Tears of the Kingdom.”

Financial Performance

For the three months ending June 30, 2024:

• Net sales: ¥246.6 billion ($1.6 billion), decreasing 46.5% year-on-year
• Net profit: ¥80.9 billion ($542.9 million), decreasing 55.3% year-on-year
• Hardware units: 2.1 million (decreasing 46.3% year-on-year)
• Software units: 30.6 million (decreasing 41.3% year-on-year)

Sector Analysis

Sales across Nintendo’s platforms, encompassing hardware, software, and accessories, fell 46.4% to ¥229 billion ($1.5 billion). Mobile and intellectual property-related sales dropped by 53.8% to ¥14.7 billion ($98.6 million).

A significant part of the previous fiscal year's first-quarter gains was attributed to titles such as “The Legend of Zelda: Tears of the Kingdom” and the release of “The Super Mario Bros Movie.”

In Q1 2025, the absence of such influential launches and the Switch entering its eighth year were key factors in reduced hardware and software unit sales.

Hardware sales for the Switch family saw a 46.3% decline year-on-year to 2.1 million units. The standard version sold 530,000 units, an 18.4% drop from 640,000 units in the same period a year prior. The Switch Lite recorded 330,000 units sold, down 23.3% from the 430,000 units sold in the previous year.

The OLED model was the best-seller during this timeframe with 1.24 million units, though this was a 56.1% decrease compared to the 2.83 million units sold in Q1 2024.

Software unit sales fell 41.3% year-on-year to 30.64 million units, down from 52.21 million units last year.

Titles like “Paper Mario: The Thousand Year Door,” released in May, sold 1.76 million units, while “Luigi's Mansion 2 HD” sold 1.19 million units following its June release.

“Princess Peach: Showtime” achieved over 1.3 million units in cumulative sell-through during this period, having been released in the previous fiscal year.

Digital software sales represented more than half of the total software sales on Switch during Q1 2025, though they fell 32.6% year-on-year to ¥80.7 billion ($541.3 million) from ¥119.6 billion the previous year.

Meanwhile, revenue from download-only software and Nintendo Switch Online remained steady, which led to an increased proportion of digital sales year-on-year.

Geographically, 74.2% of Nintendo's sales were international, with 44.8% occurring in the Americas, 25.8% in Japan, and 21.3% in Europe.

The company announced that its fiscal year forecast remains unchanged, as previously disclosed in their financial report on May 7.