In its most recent fiscal year, the Japanese gaming powerhouse saw its financial results plummet dramatically, with net profits falling by over 40%. It’s important to note that, like many Asian companies, its fiscal year runs from April 1 to March 31.
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A Tough Year for Nintendo
Nintendo has just reported a significant decline in its financial results for the fiscal year 2024-2025. Net profit fell by 43.2%, to 278.8 billion yen (approximately $1.71 billion), while revenue decreased by 30%, to 1.165 trillion yen. This downturn is largely attributable to the dwindling sales of the Switch, which is nearing the end of its lifecycle after eight successful years.
Indeed, launched in March 2017, the Switch has sold over 146 million units worldwide, making it the third best-selling console ever. However, over the past year, its sales have fallen by 22%, a result of player fatigue and a market eagerly awaiting new products (and a successor).
Much-Anticipated Switch 2 Faces Price Criticism
The Switch 2 will hit the market on June 5. This new hybrid console will feature a larger screen, detachable controllers, a built-in microphone, and a 256 GB memory—eight times that of the original version. Among the launch titles will be Mario Kart World, a brand-new installment in one of Nintendo’s flagship franchises.
However, the major issue is its higher-than-expected price tag. Priced at €469.99 in Europe ($449.99 before taxes in the USA), it represents a significant increase from the €329.99 of the first generation. Despite this, excitement appears high: Nintendo expects to sell 15 million units in the fiscal year 2025-2026, though this forecast falls short of Bloomberg analysts’ expectations of 16.8 million units.
The upcoming fiscal year presents a significant challenge. Although the company is diversifying its revenue streams (for example, through theme parks and successful films), the Switch (console, accessories, and games) accounts for about 90% of its revenue!
Demand Already Exceeds Supply
The anticipation is particularly high in Japan, where 2.2 million pre-orders have already been logged, a number that President Shuntaro Furukawa has described as exceptionally high. According to Jefferies, demand for the Switch 2 is expected to outstrip the available supply, at least in the initial months following its release.
Nintendo could also benefit from the delayed release of Sony’s highly anticipated GTA VI to May 2026, which will temporarily reduce competitive pressure. In the meantime, the Japanese company must capitalize on this anticipation to boost sales significantly to recover its financial footing, while managing a major variable: tariff rates, which fluctuate with the whims of Donald Trump.
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