Nintendo recently announced a downward adjustment to its hardware forecast as the sales for its popular gaming console, the Switch, fell short of the projected values. Over the initial nine months of the financial period, the renowned gaming company reported a drop of 31.7% in sales of its dedicated game console products to an estimated value of $5.7 billion, in comparison to the sales from the previous financial year. These diminished sales were largely attributed to decreased sales of the Nintendo Switch console and its software products.
Additionally, income from mobile and IP related sources also saw a significant decrease of 33.9%, representing a revenue of about $320 million. This slump is primarily ascribed to the challenging comparison with the highlights of 2023 that included the monumental success of the Super Mario Bros. Movie. Consequently, this caused a drop of 27.3% in the gross profit, amounting to $3.6 billion.
Being the second occasion where Nintendo has had to recalculate their financial outlook, the company is gearing up for lower than anticipated sales for the year ending in March 2025. The sales forecast for the Nintendo Switch hardware has been cut by 1.5 million units, landing the new estimate at 11 million. Their software sales forecast has also been adjusted downwards by 10 million, now standing at 150 million units.
While the Nintendo Switch has been on the market for eight years, the decline in sales has caught many by surprise. In spite of this downturn, the console has managed to sell over 150 million units, making it an incredible achievement for Nintendo. It may be unrealistic to expect the Nintendo Switch to surpass Sony’s Playstation 2 in sales, which stands strong at 160 million units. Yet, it could come close to catching up to Nintendo DS’s sales record of 154 million units.
Nintendo’s assessment for the third quarter sales ending December 31, 2024, affirms stability considering the longevity of the gaming console. Even with an overall drop of 30.6% in sales of Nintendo Switch systems, which equate to 9.54 million units and a software sales drop of 24.4% resulting in 123.98 million units, there is still a lot to hope for. Contributing to this optimism are the sales of recently released games like Legend of Zelda: Echoes of Wisdom, Super Mario Party Jamboree, Mario Kart 8 Deluxe, and Nintendo Switch Sports which boosted the numbers significantly within the past three months.
Super Mario Party Jamboree, in particular, has proven to be a successful venture, achieving record-breaking sales in the initial 11 weeks following its release in October 2024. This fast pace of sales even surpasses that of its predecessors in the Mario Party Series for the Nintendo Switch.
Moreover, Nintendo recorded 129 million ‘annual playing users’ in 2024, which points to a strong consumer base that continues to engage with the Nintendo Switch platform, eight years post-launch.
With this unanticipated decline in sales, investors are feeling the pressure for the release of the successor to the Nintendo Switch. In light of this, Nintendo has assured that it has several exciting offerings upcoming for the original Switch, such as Xenoblade Chronicles X: Definitive Edition, Pokémon Legends: Z-A, and Metroid Prime 4: Beyond.
Furthermore, Nintendo provided a first glimpse at Switch 2 through an introductory video in January. Much anticipation is building as plans for a Switch 2 Direct reveal and worldwide hands-on events have been announced for April 2. With such exciting developments on the horizon, Nintendo enthusiasts, investors and critics alike eagerly await the arrival of the highly anticipated Nintendo Switch 2.
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