Nintendo reported a significant decline in revenue and profit in its fiscal first quarter as sales of the aging Switch console decreased. The company’s revenue was 246.6 billion Japanese yen, falling short of the expected 289.61 billion yen, while net profit was 80.9 billion yen, lower than the 70.73 billion yen expected. Net sales dropped by 46.5% year-on-year, with net profit falling by 55.3%. The sales of the flagship Switch consoles also declined by 46% on the year, totaling 2.1 million units sold.
Investors are eagerly awaiting news about a successor to the Nintendo Switch console as a way to revitalize the company’s gaming business. Nintendo has previously mentioned that the next-in-line device will be announced within the current fiscal year, ending in March 2025. Despite the decline in sales, Nintendo has maintained its forecast to sell 13.5 million units of the existing Switch console model in the same period. The Switch, which is over seven years old, has been one of Nintendo’s most successful consoles, with sales boosted by popular games like Mario and Zelda.
Nintendo’s lack of blockbuster games in the June quarter, along with a 41% decline in software sales year-on-year, has contributed to the overall decline in revenue and profit. However, the company has plans to release a number of games featuring well-known characters like Mario and Donkey Kong in the coming months. Additionally, Nintendo has been exploring opportunities to license out its intellectual property for various uses, such as movies and theme parks. The company is currently working on an animated Super Mario movie, produced by Illumination and set for release in 2026.
Despite efforts to diversify its revenue streams, sales from the mobile and intellectual property-related segment of Nintendo’s business also declined by 54% year-on-year to 14.7 billion yen. With a focus on expanding into other areas beyond console gaming, Nintendo continues to face challenges in maintaining its overall revenue and profitability. The company’s strategy to leverage its popular characters and intellectual property through various mediums, such as movies and theme parks, aims to attract new users and sustain interest in its video games.
Looking ahead, investors will be monitoring Nintendo’s progress in developing new gaming consoles and software, as well as its strategies for future growth. The success of the upcoming games featuring popular characters and the release of the animated Super Mario movie will likely have a significant impact on Nintendo’s performance in the coming quarters. As the company navigates the changing landscape of the gaming industry, its ability to innovate and adapt to consumer preferences will be essential for long-term success.
