Nintendo posts $2.3b nine-month net profit on Switch 2 sales

Nintendo reported nine-month net sales of 1.9 trillion yen (US$12.22 billion) for the period ending December 31, 2025, up from 956 billion yen (US$6.15 billion) the previous year, driven by strong hardware and software sales for its Nintendo Switch 2 console.

The company sold 17.4 million units of Nintendo Switch 2 hardware and 37.9 million units of software during this period.

Software sales for the Nintendo Switch platform reached 108.9 million units, including digital downloads.

Operating profit was 300.4 billion yen (US$1.93 billion), and net profit attributable to owners of the parent was 358.8 billion yen (US$2.31 billion).

Total assets increased to 3.9 trillion yen (US$25.09 billion), mainly due to higher cash deposits and receivables.

Nintendo plans to release new titles for the Switch 2, including Mario Tennis Fever and Pokémon Pokopia, in early 2026.

The company maintained its sales forecast despite adjusting foreign exchange assumptions from 140 to 150 yen per US dollar.

🔗 Source: Nintendo

🧠 Food for thought

Implications, context, and why it matters.

Nintendo’s soaring sales hide shrinking profit margins

Strong sales follow a rough prior year, when Nintendo’s revenue fell 30% and net profit dropped 43% as the original Switch grew older 1.
That rebound is squeezing earnings, with gross margin down 24.6 percentage points because more sales come from lower-margin console hardware 2.
Other lines are soft, with IP-related business sales off 12.4% after the peak of The Super Mario Bros. Movie and digital sales down 2.8% 2.
The pressure matters because the stock trades above the sector median, which suggests investors already expect strong Switch 2 execution 1.

Nintendo’s pricing strategy is a playbook for a volatile world

Nintendo’s approach offers takeaways for global hardware makers facing economic swings and shifting buying patterns.
With the yen at historically weak levels, some commentators say Nintendo buffered Japan by setting a Japan-only price of ¥50,000, cited as ¥49,980 for the Switch 2, while competitors adjust pricing more often 3.
It is also leaning on higher physical game prices, such as Mario Kart World at $80 for a physical copy, to steer more buyers toward digital 4.
The bet is timely because sales are described as roughly 50/50 physical-to-digital, trailing more digital-first rivals and leaving more exposure to revenue loss from resales and rentals of physical games 4.