Nintendo Revenue Tops Estimates on Software Surge and Tariff Refund Despite Switch 2 Drop

Nintendo Co. beat earnings expectations in its latest quarter as robust software demand and a $300 million US tariff refund countered a 34.4% decline in Switch 2 console sales.

Hardware shipments dropped to 3.82 million units in the period, falling back from last year’s record pace when the company sold 19.86 million Switch 2 units. Despite the quarterly slowdown, total cumulative sales reached 23.68 million units, keeping adoption of the device ahead of the original Switch trajectory.

The Japanese gaming group reaffirmed its full-year hardware target of 16.5 million units for the fiscal year ending March 2027. That projection comes ahead of a planned US price increase on Sept. 1, 2026, when the console will rise from $450 to $500.

Software growth anchored the overall financial result, spearheaded by Tomodachi Life: Living the Dream, which moved 7.96 million copies in its first three months. Other key contributors included Pokémon Pokopia, which shipped 1.27 million units outside Japan, alongside strong momentum for Mario Kart World and Donkey Kong Bonanza.

Revenue was further bolstered by non-gaming operations, led by The Super Mario Galaxy Movie, which has surpassed $1 billion in worldwide box office revenue since its April 1 release to become the second-highest-grossing video game adaptation of all time.

Looking ahead, Nintendo is bracing for supply chain headwinds, budgeting an expected 100.0 billion yen ($633 million) increase in cost of sales tied directly to rising memory component prices and ongoing trade tariffs.