Switch 2 Rumors Loom, Switch Sales Dip

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 lower 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 largely 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 further reduced 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 actual figures significantly exceeded Nintendo's predictions. Nevertheless, the Switch has achieved remarkable success, surpassing 150 million units sold. While overtaking the PlayStation 2's 160 million sales to become the best-selling console of all time might be a stretch, surpassing the Nintendo DS's 154 million sales remains a possibility.

Nintendo characterized Switch and software sales in the third quarter (ending December 31, 2024) as "stable, considering the platform's eighth year."

Overall sales for the entire Nintendo Switch family of systems dropped 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 the strong performance of 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. Within its first 11 weeks (following its October 17, 2024 release), it outperformed previous Mario Party titles on the Switch (Super Mario Party and Mario Party Superstars) in terms of sales velocity.

Crucially, for Nintendo's upcoming Switch 2 launch, the number of active Switch players remains high, with 129 million annual active users in 2024. This indicates continued engagement despite the console's age.

Nintendo acknowledged the year-over-year decline in Switch unit sales but emphasized that "even in its eighth year since launch (March 2017), the Nintendo Switch continues to attract consumer interest, and sales in some weeks during the holiday season exceeded same-week sales of the previous year."

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In light of Nintendo's financial report, investors eagerly anticipate the Switch 2's launch. 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 (both scheduled for 2025).

The Switch 2 was also mentioned, though without new details. Nintendo stated, "On January 16, we announced that Nintendo Switch 2, the successor to Nintendo Switch, will be released in 2025. On the same day, we offered a first look at Nintendo Switch 2 in a video introducing the hardware."

A Switch 2 Direct is planned for April 2nd, promising further revelations. Hands-on events will also be held globally.