Nintendo Switch 2: Unit Sales Drop 41% Amid Hardware Price Hikes
Revenue and profit both missed analyst expectations as memory chip costs forced higher prices in the U.S., Canada, and Japan.
By Noor Phillips ·
Nintendo reported a 41% decline in Switch 2 console sales for the three months ended September 30. The Kyoto-based company sold 2.67 million units during the period, a sharp drop from the volume recorded in the same quarter last year. This figure also trailed the 3.82 million units sold in the preceding quarter, marking the second consecutive period of reduced hardware movement.
The downturn coincided with Nintendo's decision to raise the retail price of the Switch 2 in the United States, Canada, and Japan. These regional price adjustments followed an earlier cost increase in Japan earlier this year. The moves were driven by a persistent supply shortage in memory chips, a core component for the console. Soaring demand for these chips has pushed their costs up, squeezing Nintendo's margins.
Financial results for the fiscal second quarter fell short of market predictions. The company posted revenue of 448.2 billion yen, or approximately $2.8 billion, compared with an average LSEG estimate of 481.37 billion yen. Net profit came in at 73.5 billion yen, missing the expected 82.16 billion yen. Despite the quarterly miss, Nintendo maintained its full-year forecast of 16.5 million Switch 2 units for the fiscal year ending in March 2027.
The company has released several titles this year, including "Tomodachi Life: Living the Dream" and "Pokémon Pokopia," the latter of which became a viral sensation. However, analysts note a lack of other major marquee releases to sustain hardware sales. Investors are now focused on the release of "The Legend of Zelda: Ocarina of Time," a remake that launched on Thursday.
Serkan Toto, CEO of Kantan Games, argued that the new Zelda title is Nintendo's only true blockbuster for this fiscal year. He stated that the game is likely insufficient to satisfy investors, particularly given the increased hardware costs. Toto added that selling video game hardware has become increasingly difficult, requiring hit titles to drive volume.
He advised that Nintendo must accelerate its release schedule of major games in the next fiscal year to maintain Switch 2 momentum. The company also has new Pokémon games planned for release in 2027.
Nintendo's current strategy relies on these upcoming software titles to offset the impact of higher hardware prices and supply chain costs.
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