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Published 15:59 IST, August 2nd 2024

Nintendo Switch sales plunge, profit falls sharply

The decrease in Switch sales contributed to a dramatic 71% fall in operating profit.

Reported by: Business Desk
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Nintendo Switch 2 launch timeline
Nintendo Switch 2 launch timeline | Image: Unsplash

Nintendo Switch sales plunge: Nintendo Co Ltd reported a significant decline in sales and profit for its Nintendo Switch console as the company anticipates the launch of a new device. For the first quarter of the fiscal year ending June 30, 2024, Nintendo's Switch sales nearly halved, with only 2.1 million units sold. Despite this drop, the Kyoto-based company has maintained its full-year sales forecast at 13.5 million units.

The decrease in Switch sales contributed to a dramatic 71 per cent fall in operating profit, which dropped to 54.5 billion yen (£365 million).

This figure was more than a third below analysts' expectations. Additionally, Nintendo's mobile and intellectual property-related businesses saw a sharp decline, with revenue falling by 54 per cent to 14.7 billion yen. This drop contrasts with the previous year, which was boosted by the success of the "Super Mario Bros." film.

Industry analyst Serkan Toto, founder of Kantan Games, suggested that Nintendo's projections for the year might have been too optimistic. He noted that the financial results increase the pressure on Nintendo to accelerate the reveal of its next-generation console, potentially dubbed the Switch 2. Toto also predicted continued weakness in the July–September quarter.

Looking ahead, Nintendo's game releases include titles such as "The Legend of Zelda: Echoes of Wisdom" and "Mario & Luigi: Brothership." The company has also announced plans for a new "Super Mario" film set for release in April 2026 and a live-action adaptation of "The Legend of Zelda."

The gaming industry is grappling with escalating costs and pricing pressures. This week, Bungie, a subsidiary of Sony, revealed plans to reduce its workforce by nearly 20% as a response to these economic challenges. The move highlights the broader financial strains affecting game developers across the sector.

Nintendo’s shares fell by 2.3 per cent in Tokyo ahead of the earnings announcement but have increased by 7.6 per cent year-to-date.

(with Reuters inputs)

Updated 15:59 IST, August 2nd 2024