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

Nintendo's revised hardware forecast reflects disappointing sales of the Switch and its games, falling "below expectations." For the first nine months of the fiscal year, dedicated game console business sales dropped 31.7% year-over-year to 895.5 billion yen (approximately $5.7 billion), due to decreased sales of both the Switch and its software. Mobile and IP-related income also suffered, declining 33.9% year-over-year to 49.7 billion yen (approximately $320 million), primarily impacted by the tough comparison to 2023's highly successful The Super Mario Bros. Movie. This resulted in a 27.3% year-over-year decrease in gross profit to 565.5 billion yen (approximately $3.6 billion).

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Nintendo has again lowered its financial forecast for the year ending March 2025, for the second consecutive time. Switch hardware sales expectations were reduced by 1.5 million units to 11 million, and software sales projections were lowered by 10 million to 150 million. While sales declines were anticipated given the Switch's eighth year on the market, the drop is more significant than Nintendo initially projected. Despite this, 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 challenging, the Nintendo DS's 154 million sales record is within reach.

Nintendo characterized Switch and software sales in the third quarter (ending December 31, 2024) as "stable, given the platform's eighth year." Overall Switch family sales were down 30.6% year-over-year at 9.54 million units, and software sales declined 24.4% year-over-year to 123.98 million units. However, Nintendo highlighted strong sales of new titles: 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 also sold 1.4 million units.

Super Mario Party Jamboree stands out as a particular success. In its first 11 weeks (following its October 17, 2024 release), it outpaced sales of previous Mario Party titles for the Switch.

Significantly, Nintendo reported a record 129 million annual playing users in 2024, suggesting continued engagement despite the console's age. Nintendo noted that while Switch unit sales declined year-on-year, sales during some weeks of the holiday season even surpassed those of the previous year.

Given the financial report, investors likely anticipate a swift release of the Nintendo Switch 2. Nintendo mentioned upcoming releases for the original Switch: Xenoblade Chronicles X: Definitive Edition (March 20 release), and Pokémon Legends: Z-A and Metroid Prime 4: Beyond (scheduled for 2025). The company also reaffirmed the Switch 2's 2025 release, previously announced on January 16th, and teased a Switch 2 Direct for April 2nd, along with planned hands-on events.