Nintendo stock faces holiday test as Switch 2 sales slow

Nintendo reported stronger first-half profit on Thursday, November 5, despite weaker sales of its Switch 2 hardware. The company maintained its forecast for the fiscal year ending in March 2027, leaving investors focused on software demand and the console's next sales phase.

A report by Adnkronos, citing Jiji Press, said Nintendo's net profit for April through September rose 11.0 percent year on year to 220.9 billion yen. Operating profit increased 49.1 percent to 216.5 billion yen, while sales fell 12.1 percent to 966 billion yen.

Software offsets weaker hardware

Switch 2 hardware sales reached 6.49 million units in the first half, down about 40 percent from the year-earlier period. The weaker hardware contribution was offset by software sales and revenue linked to Nintendo's intellectual property.

Intellectual-property revenue rose 90 percent, helped by the performance of The Super Mario Galaxy Movie. The game Tomodachi Life: Living the Dream, released in April, sold 8.81 million units worldwide. Nintendo also said operating profit benefited from refunds of US tariffs.

Annual targets remain unchanged

Nintendo kept its full-year sales forecast at 2.05 trillion yen, which would be 11.4 percent below the previous fiscal year. The company continues to target operating profit of 370 billion yen, up 2.7 percent, and net profit of 310 billion yen, down 26.9 percent.

The unchanged guidance gives the second half a central role in the investment case. Nintendo must convert its software pipeline and the established Switch user base into further sales while the Switch 2 hardware comparison becomes less favorable than during the console's launch period.

Nintendo stock traded at 47.34 euros on Lang & Schwarz at 16:00 CET on Tuesday, November 10.

Developments in Japan's equity market can be followed in the Nikkei 225 market coverage.

Further company updates and analysis are available in more news and analyses on Nintendo stock.