Topline
Nintendo shares slumped Friday after the Japanese gaming giant revealed lackluster sales for its flagship Switch console, a sign of waning interest in the aging device as it limps toward the end of its life span and upping pressure on the company to announce plans for the eagerly anticipated next-generation console in line to succeed it.
Nintendo shares slumped after the company reported lackluster Switch sales.
Key Facts
Nintendo shares fell 2.34% by market close in Tokyo on Friday after the company reported disappointing revenue and profits from its first fiscal quarter (Japan’s financial year begins at the start of April).
Net sales fell by nearly half compared to the same time period last year while operating profit plummeted 71%, Nintendo said.
The decline, which was greater than analysts had expected, is partly down to the blockbuster successes of The Super Mario Bros. Movie and The Legend of Zelda: Tears of the Kingdom last year—Nintendo said there were “no such special factors” this quarter—and sluggish sales of the Switch, which is now in its eighth year since launch.
Units of both hardware and software “decreased significantly year-on-year,” Nintendo said, and the company said it sold 2.1 million Switch consoles in the first quarter, down 46% from 3.9 million sales the year before.
Software sales for things like games also fell, dropping 41% year-over-year to 30.6 million units.
While console sales have dropped off precipitously from the year before, Nintendo noted hardware sales were on par with those from the previous quarter and appear to be “stable.”
When Is The New Nintendo Switch Coming?
The Nintendo Switch celebrated its seventh birthday in March and it shows. Nintendo’s flagship console, a hybrid between handheld device and gaming console, has outlived previous Xbox and PlayStation generations and its dated hardware has struggled to keep up with the demands of increasingly large and ambitious gaming titles for years. Sales are noticeably trailing. Analysts and consumers have been expecting an update for years now and there are scant details of the Switch’s successor. The Kyoto-based giant is notoriously secretive when it comes to its projects but evidence of a successor console in the works has slowly emerged as details leak from partners working on it, including game developers and hardware manufacturers. The console, often dubbed “Switch 2” in the absence of a formal name, will reportedly have an 8-inch LCD screen, not an OLED screen, according to Bloomberg, which will be manufactured by Sharp. Specification details for the console will likely come into focus once Nintendo hands out more dev-kits to game developers, who will need them ahead of time to produce new titles for the device. Nintendo executives have long stayed mum over the Switch 2 but this year president Shuntaro Furukawa said the company would make an announcement “within this fiscal year,” giving Nintendo a deadline of the end of March 2025. This aligns with rumors the Switch 2 will launch in the first fiscal quarter of 2025, some time between the start of April and end of June.
What To Watch For
Despite sluggish sales in the first quarter, Nintendo said it still expects to sell a total of 13.5 million Switch consoles this year. The company’s roster of upcoming releases includes several gaming titles from its blockbuster franchises Including Mario, Donkey Kong, Pokemon, Metroid Prime and Zelda, and while they are all designated as “Nintendo Switch” games on Nintendo’s website, it’s possible some could be destined for the new console based on Nintendo’s estimated release date. The Legend of Zelda: Echoes of Wisdom, Super Mario Party Jamboree and Mario & Luigi: Brothership are all expected in 2024—in September, October and November, respectively—and fall firmly within the Switch’s lifespan of this financial year, as does Donkey Kong Country Returns HD. Metroid Prime 4: Beyond and Pokemon Legends: Z-A are both listed as “release date TBD” and the titles are big enough that they could potentially work as launch titles for a new console.
Big Number
143.42 million. That’s how many Switch consoles Nintendo has sold since it launched the device in 2017. The figure makes the Switch one of the best-selling game consoles of all time, behind only the Nintendo DS and Sony’s PlayStation 2, which sold 154 million and 159 million units, respectively.
Tangent
Nintendo said two of its gaming titles sold more than 1 million units this quarter. Paper Mario: The Thousand-Year Door sold 1.76 million units and Luigi’s Mansion 2 sold 1.19 million units. Another unnamed title from another publisher also sold more than 1 million units, though Nintendo did not provide further details.
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