Switch 2 Looms, Switch Sales Slump

Nintendo's hardware sales forecast has been revised downward again, with Switch console and game sales falling "below expectations." For the first nine months of the fiscal year, dedicated game console sales dropped 31.7% year-over-year to 895.5 billion yen (approximately $5.7 billion), reflecting decreased sales of both the Switch and its software.

Mobile and IP-related revenue also experienced a significant decline, falling 33.9% year-over-year to 49.7 billion yen (approximately $320 million), primarily due to unfavorable comparisons with the exceptionally successful 2023 release of 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 fiscal year ending March 2025, marking the second consecutive downward revision. The company anticipates even lower Switch hardware sales, reducing its projection by 1.5 million units to 11 million, and software sales by 10 million units to 150 million.

While sales declines were expected for the eight-year-old Switch, the magnitude surpasses Nintendo's initial projections. Nevertheless, the Switch has achieved remarkable success, exceeding 150 million units sold. While surpassing the PlayStation 2's 160 million sales may be unlikely, the Nintendo DS's 154 million sales are within reach.

Nintendo characterized Switch and software sales in the third quarter (ending December 31, 2024) as "stable, considering the platform's eighth year." Overall Switch family sales decreased by 30.6% year-over-year to 9.54 million units, while software sales fell 24.4% year-over-year to 123.98 million units. However, Nintendo highlighted strong sales of new titles including 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 proved particularly successful, outpacing sales of previous Mario Party titles on the Switch within its first 11 weeks of release (October 17, 2024).

Significantly, active Switch users reached an all-time high of 129 million annual players in 2024, indicating sustained engagement despite the console's age. Nintendo noted that Switch unit sales declined year-over-year, but holiday season sales in some weeks even surpassed those of the previous year.

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Given the recent financial report, investors anticipate a swift release of the Nintendo Switch 2. 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 (2025).

The Switch 2 was also mentioned, with Nintendo reiterating its planned 2025 release and referencing the January 16th hardware reveal video. A dedicated Switch 2 Direct is scheduled for April 2nd, alongside global hands-on events.