Tokyo (AFP) – Japanese gaming giant Nintendo reported a drop in quarterly net profit on Thursday as unit sales slowed for its Switch 2 console, but maintained its annual forecasts. A remake of the 1990s action-adventure classic “The Legend of Zelda: Ocarina of Time”, which comes out Thursday, has sparked nostalgic fan excitement. But market analysts will be watching to see how much the title can boost sales of the Switch 2, which became the world’s fastest-selling games console on its 2025 release.
Nintendo reported an 11 percent year-on-year rise in net profit for the first half of 2026-27. However, in the second quarter, from July to September, net profit was down 29 percent to 73.5 billion yen ($465.3 million), missing estimates of 82.2 billion yen in a Bloomberg survey of analysts. The company maintained its annual net profit forecast of 310 billion yen. “Although sales declined year-on-year due to lower hardware unit sales, operating profit rose nearly 50 percent in the first six months, due to steady sales of games and a windfall connected to US tariff refunds,” Nintendo said.
The company sold nearly 6.5 million Switch 2 consoles in the first half, down from nearly 10.4 million the previous year when the gadget was new. This year, Nintendo raised the price of the Switch 2, as the global artificial intelligence boom causes the price of memory chips used in everyday electronics to soar.
Some analysts have also said that the lack of any blockbuster title to boost Switch 2 adoption among gamers has led to sluggish sales of the console. “While working to bring Nintendo Switch 2 to more consumers, we will also leverage the Nintendo Switch hardware installed base and rich software lineup to expand software sales and maintain engagement,” the company said Thursday.
Nintendo’s latest addition to its long-running Zelda series, “Ocarina of Time”, is being released gradually across the world as part of the 40th anniversary of the saga. It has already garnered widespread praise with a score of 96 out of 100 on aggregator site Metacritic by the eve of its release, putting it among the best-reviewed titles of the year so far.
In related news, Sony upgraded its annual earnings forecast for the current fiscal year on Thursday, thanks to robust sales of its games, music, and movies. The firm now expects to earn 1.33 trillion yen for the year to March, up from the previous upgraded forecast of 1.21 trillion issued in July. The Japanese tech-entertainment conglomerate said second-quarter net profit jumped 44 percent to 449.6 billion yen, driven largely by games and films.
For the game operations, sales were helped by favorable foreign exchange rates but also strong sales of new titles. In the movie segment, Sony noted an “increase in theatrical revenues primarily due to the contribution of ‘Spider-Man: Brand New Day’.” The film was released in July and was a blockbuster success. The game segment is also expected to benefit from the eagerly awaited November launch of “Grand Theft Auto VI”, which is predicted to be the biggest release in gaming for years.
© 2024 AFP
