Nintendo has announced a reduction in its sales forecast for the Switch console, projecting sales of 12.5 million units for the fiscal year ending March 2025. This is a decrease from the previous forecast of 13.5 million units, as demand for the seven-year-old console wanes.
Declining Demand for an Ageing Console
The Switch, Nintendo’s second best-selling console after the Nintendo DS, has seen a decline in sales. Despite efforts to extend its market appeal through popular franchises like Mario and Zelda, the impact is diminishing. In the first half of the last fiscal year, releases like the “Super Mario Bros. Movie” and “The Legend of Zelda: Tears of the Kingdom” helped boost sales. However, such effects have not been replicated this year, leading to a significant drop in both hardware and software sales.
Financial Performance
In its fiscal second quarter ending September 30, Nintendo reported revenue of 276.7 billion yen, slightly above estimates, but net profit fell 69% year-on-year to 27.7 billion yen, missing expectations of 48.06 billion yen. The company also adjusted its full-year financial forecasts, lowering expected sales from 1.35 trillion yen to 1.28 trillion yen and operating profit from 400 billion yen to 360 billion yen.
Looking Ahead
Investors are eagerly awaiting news of a successor to the Switch, which Nintendo has indicated will be announced by the end of the current fiscal year. A new console could potentially rejuvenate Nintendo’s market position and drive future growth.
In response to the downturn, Nintendo is also exploring other avenues, such as licensing its intellectual property for movies and theme parks. A new Super Mario movie is scheduled for release in 2026, signaling continued efforts to leverage its iconic characters beyond gaming.
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