Switch Sales Decline Amidst Anticipation of Successor

Nintendo's hardware sales forecast takes another hit as Switch sales fall short of projections. 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), reflecting decreased sales of both the Nintendo Switch console and its software. Mobile and IP-related revenue also experienced a significant decline of 33.9% year-over-year to 49.7 billion yen (approximately $320 million), primarily due to lower performance compared to 2023's highly 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, marking the second consecutive downward revision. The company anticipates even lower Nintendo Switch hardware sales than previously projected, reducing its forecast by 1.5 million units to 11 million, and software sales by 10 million to 150 million.

While sales declines were expected for the eight-year-old Switch, the magnitude surpasses Nintendo's initial projections. Nevertheless, the Switch has achieved remarkable success with over 150 million units sold. While surpassing the PlayStation 2's 160 million sales to become the best-selling console of all time may be unlikely, the Nintendo DS's 154 million sales record is within reach.

Nintendo characterized Switch and software sales in Q3 2024 (ending December 31, 2024) as "stable considering the platform's age." Overall Switch family sales decreased by 30.6% year-over-year to 9.54 million units, while software sales dropped 24.4% year-over-year to 123.98 million units. However, Nintendo highlighted strong performance for new releases: 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 units sold.

Super Mario Party Jamboree stands out as a significant success, outpacing sales of previous Mario Party titles on the Switch within its first 11 weeks of release (October 17, 2024).

Crucially, active Switch users remain high, with 129 million annual playing users in 2024, suggesting continued engagement despite the console's age. Nintendo noted that while Switch unit sales declined, sales in certain weeks during the holiday season surpassed those of the previous year.

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In light of the financial report, investor anticipation for the Nintendo Switch 2 is high. Nintendo confirmed upcoming releases for the original Switch: Xenoblade Chronicles X: Definitive Edition (March 20), and Pokémon Legends: Z-A and Metroid Prime 4: Beyond (2025). The company reiterated the Switch 2's 2025 release date and plans a dedicated Switch 2 Direct on April 2nd with further details, along with hands-on events globally.