Switch 2 Looms, Original Sales Dip

Nintendo's hardware sales forecast has been revised downward again, with Switch and game sales falling "below expectations." For the first nine months of the fiscal year, dedicated 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 income also declined by 33.9% year-over-year to 49.7 billion yen (approximately $320 million), largely attributed to the comparison with 2023's successful The 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 again lowered its financial forecast for the fiscal year ending March 2025, for the second consecutive time. The company anticipates even lower Nintendo Switch hardware sales, reducing its projection by 1.5 million units to 11 million, and software sales by 10 million to 150 million. While declines were expected for the eight-year-old Switch, the drop is steeper than anticipated. Nevertheless, the Switch has surpassed 150 million units sold, a remarkable achievement. While overtaking the PlayStation 2's 160 million sales may be unlikely, surpassing the Nintendo DS's 154 million sales remains a possibility.

Nintendo described Switch and software sales in Q3 2024 (ending December 31, 2024) as "stable considering the platform's age." Overall Switch family sales were down 30.6% year-over-year at 9.54 million units, with software sales declining 24.4% 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 within its first 11 weeks of release (October 17, 2024).

Significantly, active Switch users reached a record 129 million "annual playing users" in 2024, indicating continued engagement despite the console's age. Nintendo noted that Switch unit sales declined year-on-year, but holiday sales in some weeks surpassed those of the previous year.

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Given the financial report, investors eagerly anticipate the Switch 2's release. Nintendo mentioned upcoming titles for the original Switch: Xenoblade Chronicles X: Definitive Edition (March 20 release), and Pokémon Legends: Z-A and Metroid Prime 4: Beyond (scheduled for 2025). The Switch 2 was also mentioned, with a planned release in 2025 and a dedicated Direct presentation on April 2nd, along with hands-on events.