Nintendo Reports Switch 2 Hardware Decline and Higher Profit

Nintendo reported on November 5, 2026, that Switch 2 hardware sell-in fell 37.4% year on year to 6.49 million units in the six months ended September 30, 2026. Operating profit moved in the opposite direction, rising 49.1% to 216.5 billion yen as software and digital sales expanded.

The comparison covers April through September 2026 and comes against a prior-year period that included the console’s June 2025 launch. Quarterly Switch 2 hardware sell-in slowed from 3.82 million units in the fiscal first quarter to 2.67 million in the second; the corresponding quarter of the previous fiscal year reached 4.54 million.

Even with the decline, worldwide consolidated life-to-date sales reached 26.35 million Switch 2 consoles and 73.21 million software units by September 30. The original Switch added 1.27 million hardware units during the half, down 32.7%, taking its lifetime hardware total to 157.20 million. Nintendo’s sell-in measure includes sales to corporate partners and direct consumer sales through its websites. Software unit counts include packaged and downloadable versions, but exclude download-only software and add-on content.

Software and Digital Revenue Offset Hardware Weakness

Switch 2 software sell-in rose 18.8% to 24.49 million units, while original Switch software increased 6.8% to 65.73 million. Splatoon Raiders sold 2.42 million units and Fire Emblem: Fortune’s Weave sold 1.34 million during the half; Tomodachi Life: Living the Dream reached 8.81 million on Switch. Mario Kart World added another 1.78 million units in the period to reach 16.48 million life-to-date, a total that includes bundled and downloadable versions.

Digital sales climbed 60.5% to 249.6 billion yen and accounted for 60.7% of dedicated-platform software sales, up 6.2 percentage points. Nintendo attributed the increase to downloadable versions of packaged software and continued yen weakness. The measure also includes download-only games, add-on content and Nintendo Switch Online. Revenue from software bundled with hardware, however, is classified as hardware revenue rather than software or digital sales.

Sales Mix and Tariff Refunds Lift Earnings

Consolidated net sales still fell 12.1% to 966.0 billion yen, with dedicated-video-game-platform sales down 15.3% to 903.3 billion yen. Nintendo attributed that decline primarily to lower hardware unit sales despite higher software volumes and the weak yen. IP-related income moved in the other direction, rising 87.9% to 62.7 billion yen, partly reflecting growth in movie and video income related to The Super Mario Galaxy Movie.

The changing mix lifted gross profit 22.1% to 486.4 billion yen and the gross-profit ratio from 36.2% to 50.4%. Hardware represented 54.5% of dedicated-platform sales, down from 73.2%, while first-party games rose from 67.2% to 76.6% of software sales. The operating-profit ratio increased from 13.2% to 22.4%.

Approximately $300 million in U.S. tariff refunds was also recorded as a reduction of cost of sales in the first quarter. Nintendo said the refunded tariffs had primarily been borne by the company rather than passed on to consumers through product prices. The earnings improvement therefore reflects both a larger software share and the tariff refunds rather than hardware growth.

Nintendo Holds Its Full-Year Forecast

Nintendo retained the forecast it published on May 8, 2026, for the fiscal year ending March 31, 2027: 2.05 trillion yen in net sales, down 11.4%, and 370.0 billion yen in operating profit, up 2.7%. Its unit plan calls for 16.50 million Switch 2 consoles, down 16.9%, alongside 60.00 million software units, up 23.2%. Approximately 100.0 billion yen for rising component prices, particularly memory, and tariff measures is factored into cost of sales.

The scheduled Switch 2 lineup includes The Legend of Zelda: Ocarina of Time on November 5, 2026, Pikmin 4 – Nintendo Switch 2 Edition + Dandori Academy on November 12, 2026, Xenoblade Chronicles 3 – Nintendo Switch 2 Edition on December 3, 2026, and Metroid Ravenous on January 28, 2027. Nintendo plans to expand sales of existing games while continuously introducing new ones, with other publishers also planning releases.

The coming games and existing library therefore carry the engagement side of Nintendo’s plan: software sales are forecast to grow despite lower hardware volume, while memory and tariff costs remain built into the earnings assumptions.