Nintendo reported fiscal first quarter results for the period ended June 30, beating analyst estimates for revenue and profits. However, the Nintendo Switch 2 console sales saw a sharp decline coming off the console launch a year ago.
The Kyoto, Japan-based game company reported revenue of 517.8 billion Japanese yen ($3.28 billion), compared with 444.96 billion yen expected. Net profit was 147.4 billion yen compared with 78.30 billion yen expected. [Updated at 1:51 p.m. 8/6/26 with analyst commentary].
The company held to its previous forecast for the year ending March 2027 announced in May, keeping its annual net revenues estimate unchanged at 2.05 trillion yen.
Switch 2 console sales were 3.82 million, down 34.4% from a year earlier but above on analysts’ estimates of two million. Sales of the Nintendo Switch dropped to 660,000 units sold, down 31.8%. Tomodachi Life: Living the Dream sold 7.94 million copies (far above expectations), while Pokémon Pokopia sold 1.27 million units. That helped Nintendo hit its financial targets.
Part of Nintendo’s expectations included a 100 billion yen impact from higher memory chips prices, as well as tariffs, which raised costs.
In the Japanese market, Nintendo raised Switch 2 prices in May. In the U.S., Nintendo is raising its retail price by $50 from $450 to $500 on September 1.
Beyond games, Nintendo said “The Super Mario Galaxy Movie” has generated more than $1 billion in global box office revenue since its worldwide release on April 1, making it the second highest-grossing film ever based on a video game.
Nick McKay, an analyst at Freedom Capital Markets, said in a report that the results were a better-than-expected start to Switch 2’s second fiscal year. He noted Q1:27 revenue and earnings per share were ¥518 billion and ¥128, well above our estimates of ¥345 billion and ¥48, and consensus of ¥437 billion and ¥62.
The hardware sales at ¥267 billion were above his estimate of ¥170 billion, with software sales at ¥216 billion, above McKay’s estimate of ¥148 billion. Software unit sales were 3.82 million and 9.46 million, compared with his estimates of 11 million.
“We attribute the hardware upside to sell-in timing and a solid recent software release slate that included Pokémon Pokopia, Tomodachi Life: Living the Dream, Yoshi and the Mysterious Book, and Star Fox,” McKay said.
He added, “In addition, it is possible that the early May announcement of hardware price increases, with the implementation of those increases following several weeks or months thereafter depending upon geography, spurred near-term buying. The profit upside relative to our expectations was driven by a roughly $300 million reduction in cost of sales related to tariff refunds (with a value approaching ¥50 billion by our math) and close to ¥64 billion of non-operating income.”
Nintendo maintained its fiscal year 2027 guidance that it previously gave early in the year. The net sales and EPS targets remain at ¥2,050 billion and ¥269. The latter item, in particular, seems too low given that Nintendo has already surpassed the ¥60 billion of non-operating income implied by guidance, with three quarters still to go, although the potential strengthening of the yen remains a risk, McKay said.
He said Nintendo continues to expect to ship 16.5 million and 60 million Switch 2 hardware and software units in FY:27, compared to 19.86 million and 48.71 million in its debut year of FY:26.