Nintendo Switch Sales Plummet Amidst Sequel Hype

Nintendo has again lowered its hardware sales forecast, citing lower-than-expected sales of the Switch console and its games. For the first nine months of the fiscal year, dedicated video game console sales dropped 31.7% year-over-year to 895.5 billion yen (approximately $5.7 billion) due to decreased Switch and software sales. Mobile and IP-related revenue also fell, declining 33.9% year-over-year to 49.7 billion yen (approximately $320 million), largely attributed to the tough comparison with 2023's highly successful Super Mario Bros. Movie. This resulted in a 27.3% year-over-year decrease in gross profit to 565.5 billion yen (approximately $3.6 billion).

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Nintendo has revised its financial forecast for the fiscal year ending March 2025 downwards for the second consecutive time. The company now projects even lower Nintendo Switch hardware sales, reducing its forecast by 1.5 million units to 11 million, and software sales by 10 million units to 150 million. While sales declines were anticipated given the Switch is in its eighth year, the drop is steeper than Nintendo initially predicted. Despite this, the Switch has surpassed 150 million units sold, a remarkable achievement. While overtaking the PlayStation 2's 160 million sales may be challenging, surpassing the Nintendo DS's 154 million sales remains a possibility.

Nintendo described Switch and software sales in the third quarter (ending December 31, 2024) as "stable, considering the platform's eighth year." Overall Switch family sales were down 30.6% year-over-year at 9.54 million units, and software sales decreased by 24.4% year-over-year to 123.98 million units. However, Nintendo highlighted strong sales of new titles: The Legend of Zelda: Echoes of Wisdom (3.91 million), Super Mario Party Jamboree (6.17 million), Mario Kart 8 Deluxe (5.38 million), and Nintendo Switch Sports (2.63 million) during the quarter. Mario & Luigi: Brothership reached 1.4 million sales.

Super Mario Party Jamboree performed exceptionally well, exceeding the sales pace of previous Mario Party titles on the Switch within its first 11 weeks of release (October 17, 2024). Crucially, Nintendo reported a record 129 million annual playing users in 2024, indicating sustained player engagement despite the console's age. Nintendo noted that Switch unit sales declined year-on-year, but sales in some holiday weeks surpassed those of the previous year.

Given the financial report, investors will eagerly anticipate the Nintendo Switch 2's release. Nintendo mentioned upcoming Switch titles: Xenoblade Chronicles X: Definitive Edition (March 20 release) and Pokémon Legends: Z-A and Metroid Prime 4: Beyond (scheduled for 2025). The company reaffirmed the Switch 2's 2025 release, previously announced on January 16th, and promised a dedicated Switch 2 Direct on April 2nd with further details, along with global hands-on events.