Nintendo saw a decline in both net sales and operating profit during the year. first quarter of the current fiscal year.
The company saw net sales decline 46.5 percent year-on-year to 246.6 billion yen ($1.68 billion), while operating profit fell 70.6 percent to 54.5 billion yen ($371.6 million). Profit attributable to owners of the parent fell 55.3 percent to 80.9 billion yen ($551.6 million).
There are some predictable, but still interesting, reasons for this decline. For starters, the Nintendo Switch is over eight years old, which means hardware sales are declining.
As of today, the Switch family has sold 143.42 million units worldwide. That’s a mind-boggling metric, which means it’s no surprise to hear that quarterly hardware sales fell 46.3 percent year-over-year to 2.1 million units. Despite this decline, Nintendo said sales are relatively stable compared to the last quarter.
“Special factors” like Zelda and last year's Mario Bros. movie contributed to a steeper decline
It also said that the first quarter of the previous fiscal year saw “extremely strong” software and hardware sales due to the launch of The Legend of Zelda: Tears of the Kingdom and the marketing ripples caused by the Super Mario Bros. movie. Those, he explained, were “special factors” that led to a steep year-over-year decline.
“There were no major factors in the first quarter of this fiscal year, and with Nintendo Switch now in its eighth year since its launch, unit sales of both hardware and software decreased significantly compared to the prior year,” the company added.
As Nintendo highlighted, software sales fell 41.3 percent year-over-year to 30.64 million units, due to the lack of a major release such as Tears of the Kingdomof which 20.8 million units have been sold worldwide.
He added that the new versions like Paper Mario: The Thousand-Year Door (1.76 million units), Princess Peach: It's show time! (1.3 million units) and Luigi's Mansion 2 HD (1.19 million units) got off to a “good start”.
Taking a quick look at other metrics, the number of Nintendo Switch users playing games annually surpassed 128 million from July 2023 to June 2024. Digital sales fell 32.6 percent year-over-year to 80.7 billion yen in the first quarter, but still accounted for 58.9 percent of total software sales.
Nintendo neglected to mention the long-rumored successor to the Switch, but it did already confirmed The console will be unveiled before the end of the current fiscal year, which is March 31, 2025.
The company reaffirmed its current fiscal forecast, expecting Switch hardware sales to reach 13.5 million units before the end of the fiscal year.
