Nintendo profits fall 55% as Switch console sales drop

Nintendo on Friday reported a 55 percent drop in profit, which was caused by a decline in sales of its seven-year-old Switch console.

The company’s shares fell nearly 10% on Friday after announcing disappointing earnings reports.

The Japanese video game company missed LSEG analysts’ expectations in the first quarter, which runs through June and is also the Bank of Japan’s fiscal year. Nintendo posted revenue of 246.6 billion yen, or $1.68 billion, below estimates of $1.97 billion.

Nintendo reported net income of $551 million, missing expectations of $482 million and down 55.3% from a year earlier.

The company sold 2.1 million units of its Switch video game console, down 46% from a year earlier.

Investors are hoping Nintendo will soon release its next big device, taking over from the Switch, which launched in 2017. The Switch can be connected to a home computer system or used as a standalone portable device, and after sales of the DS and Wii systems declined, it has renewed Nintendo’s enthusiasm.

The Switch is Nintendo’s second-largest selling console, behind the Nintendo DS, which surged in popularity in the early 2000s.

Nintendo fans have seen various versions of the Switch over the years, with different screens and features. However, declining sales suggest it is time for Nintendo to release its next business savior.

Serkan Toto, founder of Kantan Games, a games industry consultancy, told Reuters that weak earnings “increase the pressure on Nintendo to unveil Switch 2.”

He added that the next quarter will probably also be weak for Nintendo.

The company previously said it would announce the launch of its next device in March 2025 and expects to sell 13.5 million Switch consoles in the meantime, which Nintendo confirmed on Friday, according to CNBC.

In addition to its trend-setting video game devices, Nintendo has gained popularity for its game releases—those are iconic characters like Mario and Luigi. The company didn’t release any major video game hits in the first quarter, so it wasn’t able to offset the loss of Switch sales.

Nintendo software sales fell 41% year-on-year to 30.64 million units.

The company has focused on selling intellectual property to increase profits. Nintendo is currently involved in an animated Super Mario Bros. film.

However, sales of the intellectual property division fell 54% from a year earlier to $100 million.