Nintendo Profit Jumps 54% as Switch 2 and Super Mario Movie Boost Earnings

Nintendo reported a strong start to its new financial year, with quarterly net profit climbing more than 50% as its Switch 2 ecosystem and growing entertainment business helped offset weaker hardware revenue and rising costs.

Profit attributable to Nintendo’s owners reached ¥147.4 billion for the three months ended June 30, 2026, representing a 53.5% increase from ¥96.0 billion in the same period a year earlier.

The earnings improvement came even as Nintendo’s quarterly net sales declined 9.5% to ¥517.8 billion, highlighting the growing importance of software, digital sales, intellectual property and entertainment-related income to the company’s broader business.

Switch 2 Maintains Strong Consumer Demand

Nintendo sold 3.82 million Switch 2 consoles during the April-to-June quarter.

That was below the 5.82 million units sold during the comparable period following the console’s launch, but the company said consumers continued adopting the system as its software catalogue expanded.

Nintendo Switch 2 software sales moved in the opposite direction, increasing 9.2% year-on-year to 9.46 million units during the quarter.

The original Nintendo Switch also remained part of the company’s ecosystem. Nintendo sold around 660,000 units of the older console during the period, while software sales for the platform reached 33.81 million units.

Titles including Tomodachi Life: Living the Dream and Pokémon Pokopia helped support software activity across Nintendo’s platforms.

Super Mario Galaxy Movie Adds to Nintendo’s Momentum

Nintendo’s growing presence beyond video games also contributed significantly to its quarterly performance.

Income from intellectual property-related activities increased 107.4% year-on-year to ¥34.8 billion, with Nintendo attributing part of that growth to movie and video revenue associated with The Super Mario Galaxy Movie.

The film began its global theatrical rollout in April 2026 and has generated more than $1 billion in worldwide box-office revenue, according to Nintendo.

The performance demonstrates how Nintendo is increasingly using its well-known characters and franchises to expand beyond traditional console gaming.

Movies, merchandise and other entertainment initiatives give the company additional ways to introduce characters such as Mario to audiences who may not already use Nintendo gaming systems.

Digital Sales Surge 90%

Nintendo also recorded significant growth in its digital business.

Digital sales climbed 90% from a year earlier to ¥132.7 billion, while digital transactions accounted for 61.5% of dedicated gaming platform software revenue.

The increase reflected stronger sales of downloadable games and other digital content, along with the impact of currency movements.

Digital distribution has become increasingly important to Nintendo as consumers shift toward downloadable games, online services and digital add-on content.

Operating Profit More Than Doubles

Nintendo’s operating profit reached approximately ¥142.6 billion, representing an increase of about 150% from the previous year.

Ordinary profit also climbed sharply to ¥206.2 billion, helped partly by higher non-operating income, foreign exchange gains and profit contributions from equity-accounted businesses.

The improvement helped Nintendo deliver substantially stronger bottom-line performance despite the decline in overall quarterly revenue.

Tariffs and Component Prices Remain a Challenge

Nintendo nevertheless faces significant cost pressures during the current financial year.

The company said its annual forecast takes account of US tariff measures in force at the end of March 2026.

Nintendo has also factored approximately ¥100 billion of additional costs related to higher component prices — particularly memory — and tariffs into its financial expectations.

Rising semiconductor and memory prices have become an important issue across the global consumer electronics industry, potentially increasing production costs for consoles and other hardware.

Nintendo Keeps Full-Year Forecast Unchanged

For the financial year ending March 31, 2027, Nintendo continues to forecast net sales of approximately ¥2.05 trillion.

The company expects operating profit of ¥370 billion and net profit of around ¥310 billion.

That would represent a decline of approximately 27% in annual net profit compared with the previous financial year.

Nintendo expects to sell around 16.5 million Switch 2 consoles during the full financial year. Switch 2 software sales are projected to reach approximately 60 million units.

The forecasts remain unchanged from Nintendo’s projections announced in May.

Nintendo Expands Beyond the Console Business

Nintendo’s latest earnings highlight how its business is gradually becoming more diversified.

Hardware remains central to its strategy, but digital software, intellectual property, movies and other forms of entertainment are playing increasingly important roles in revenue and profitability.

With Switch 2 now entering its second year and Nintendo continuing to invest in new games and entertainment projects, the company will be looking to maintain consumer engagement while navigating higher hardware costs and uncertain global trade conditions.

For investors and gaming industry observers, Nintendo’s latest results suggest that the strength of its characters and software ecosystem is helping the company generate growth even when hardware sales slow from their initial launch levels.

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