Nintendo stock faces holiday test as Switch 2 sales slow

Nintendo reported stronger first-half profit on November 5 despite a sharp slowdown in Switch 2 hardware sales, keeping investors focused on holiday demand. The six-month results covering April through September showed that software sales and a refund linked to U.S. tariffs helped offset weaker console shipments, according to RTE.

Software supports earnings momentum

Net profit attributable to Nintendo shareholders rose 11 percent year on year to 220.9 billion yen in the first half of fiscal 2026-27. Revenue fell 12.1 percent to 966.0 billion yen, but operating profit increased 49.1 percent to 216.5 billion yen.

The earnings mix shifted toward software, which carries a higher margin than hardware. Nintendo also benefited from a first-quarter refund of U.S. tariffs that had previously been recorded in cost of sales. Digital sales rose 60.5 percent to 249.6 billion yen, providing another offset to lower console shipments.

Software demand remained firm across the two Switch generations. Switch 2 software sales reached 24.49 million units in the first half, while the original Switch generated 65.73 million software sales. Tomodachi Life: Living the Dream sold 8.81 million units worldwide, supporting the broader installed-base strategy.

Switch 2 enters a demanding holiday period

Nintendo sold 6.49 million Switch 2 consoles in the first half, down from 10.4 million in the year-earlier period. The comparison reflects the difficult base created by the successor console's launch surge. The slower hardware pace raises the importance of software releases and holiday promotions as Nintendo seeks to expand the new platform's installed base.

The company maintained its target of 16.5 million Switch 2 units for the fiscal year ending March 2027. With 6.49 million units sold during the first half, the remaining six months will carry most of the burden for reaching that target. Nintendo said it plans to combine sales of existing games with new releases to bring the console to more consumers.

The latest Zelda release was highlighted as a near-term software catalyst in the RTE report. Nintendo also pointed to further releases scheduled for the coming months, including Metroid Ravenous in January. That pipeline gives the company additional opportunities to convert its large hardware base into software revenue.

Unchanged outlook leaves execution in focus

Nintendo kept its annual revenue forecast at 2.05 trillion yen and its net profit forecast at 310 billion yen. Operating profit is expected to reach 370 billion yen. The unchanged targets signal that management still expects stronger software sales and holiday demand to compensate for the difficult hardware comparison.

For investors, the results present a mixed operating picture rather than a one-way trend. Profitability improved materially, but the decline in hardware sales increases the sensitivity of the outlook to the holiday release schedule. The second-half console target and the reception for new software will therefore remain central to the investment case.

Nintendo stock traded at 47.34 euros on Lang & Schwarz at 16:00 CET on Tuesday, November 10, 2026. The quote is shown without a daily direction because a compatible Xetra closing comparison was not established.

Global investors can follow broader moves through current S&P 500 market coverage.

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