Nintendo cuts its operating profit forecast

Nintendo cuts its operating profit forecast as sales plunge

Nintendo on cut forecast for Switch sales for its fiscal year ending March 2025 as demand wanes for its ageing console.

Nintendo’s recent struggles have come as demand for its flagship Switch console, which is now more than seven years old, is beginning to fade.

Investors are waiting for news surrounding a successor to the Switch which they hope will re-energize Nintendo’s gaming business.

The Kyoto-based company revised its revenue and operating profit forecasts to 1.28 trillion yen ($8.4 billion) and 360 billion yen, respectively, for the fiscal year ending in March 2025 — down 5.2% and 10% from its previous predictions of 1.35 trillion yen and 400 billion yen. It did not change its net profit outlook of 300 billion yen.

Here’s how Nintendo did in its fiscal second quarter ended Sept. 30 versus LSEG estimates:

Revenue: 276.7 billion Japanese yen ($1.8 billion), compared with 273.34 billion yen expected.

Net profit: 27.7 billion yen, versus 48.06 billion yen expected.

Revenue fell 17% year-on-year. Net profit plunged just over 69% versus the same period last year.

Super Mario, Zelda boost fading

The Switch is Nintendo’s second best-selling console in history, behind the Nintendo DS. Despite the recent fall in sales, Nintendo has prolonged the console’s appeal for an extended period of time since its launch in 2017 by relying on its recognizable characters.

In its last fiscal year, Nintendo managed to reinvigorate sales of the Switch thanks to the the success of the “Super Mario Bros. Movie” and the highly anticipated release of the “The Legend of Zelda: Tears of the Kingdom” game, which underscored the appeal of its iconic characters.

But that effect is fading.

Nintendo noted the boost that the company received in the first half of its last fiscal year, but said “there were no such special factors in the first half of this fiscal year, and with Nintendo Switch now in its eighth year since launch, unit sales of both hardware and software decreased significantly year-on-year.”

Sales of the Switch totaled 4.72 million units in the six months ended Sept. 30, compared with 6.84 million units in the same period of last year.

In the face of falling sales, Nintendo has tried to license out its intellectual property for use everywhere, from movies to theme parks. A new Super Mario movie is slated for release in 2026.