With Nintendo Switch 2 Waiting in the Wings, Sales of the Original Switch and Its Games Continue to Tumble

Nintendo's hardware sales forecast has been revised downward again, as Switch console and game sales fell short of projections.

For the first nine months of the fiscal year, Nintendo's dedicated video game console business saw a 31.7% year-over-year drop in revenue, reaching 895.5 billion yen (approximately $5.7 billion). This significant decline stems from reduced sales of both the Nintendo Switch and its software.

Mobile and IP-related income also experienced a downturn, decreasing by 33.9% year-over-year to 49.7 billion yen (approximately $320 million). This is primarily attributed to the challenging comparison with the exceptionally successful 2023 release of The Super Mario Bros. Movie.

Consequently, gross profit decreased by 27.3% year-over-year to 565.5 billion yen (approximately $3.6 billion).

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Nintendo has lowered its financial forecast for the fiscal year ending March 2025 for the second consecutive time. The company anticipates even lower sales of Nintendo Switch hardware, reducing its projection by 1.5 million units to 11 million, and software sales by 10 million units to 150 million.

While sales declines were expected for the eight-year-old Switch, the magnitude surpasses Nintendo's initial predictions. 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 might be unlikely, the Nintendo DS's 154 million sales are within reach.

Nintendo characterized Switch and software sales in Q3 2024 (ending December 31, 2024) as "stable considering the platform's age."

Overall sales for the Nintendo Switch family of systems decreased by 30.6% year-over-year to 9.54 million units. Software sales declined by 24.4% year-over-year to 123.98 million units. However, Nintendo highlighted strong sales of new titles during the quarter: 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). Mario & Luigi: Brothership also sold 1.4 million units.

Super Mario Party Jamboree stands out as a significant success. Within 11 weeks of its October 17, 2024 release, its sales surpassed those of previous Mario Party titles for the Switch.

Crucially, for Nintendo's upcoming Switch 2 launch, the active player base remains strong, with 129 million annual active users in 2024. This demonstrates continued engagement despite the console's age.

Nintendo acknowledged the year-over-year decline in Switch unit sales but emphasized that the console continues to attract consumers, with holiday sales exceeding those of the previous year in some weeks.

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In light of Nintendo's financial report, investors eagerly anticipate the Switch 2's release. 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 Switch 2 was also mentioned, with Nintendo reiterating its planned 2025 release and referencing the January 16th hardware reveal video. A dedicated Switch 2 Direct presentation is scheduled for April 2nd, along with hands-on events globally.