Nintendo First-Quarter Profit Soars Past Estimates, Aided by Software Sales and Tariff Refund

Nintendo announced on Thursday its financial results for the first quarter of the fiscal year, revealing a significant jump in profit that far exceeded analyst expectations. For the three months ending June 30, 2026, the company posted a net profit of ¥147.4 billion ($934 million), a 53.5% increase from the same period last year. Operating profit saw an even more dramatic rise, surging 150.5% to ¥142.6 billion. This growth in profitability occurred despite a 9.5% year-over-year decline in net sales, which totaled ¥517.8 billion ($3.3 billion) but still surpassed market forecasts.

Software and One-Time Gains Drive Profitability

The company's strong profit performance was largely attributed to two key factors: robust software sales and a substantial one-time gain from the refund of U.S. tariffs. Nintendo received a refund of approximately $300 million related to U.S. tariffs, which it had largely absorbed rather than passing on to consumers. Additionally, intellectual property (IP) related income more than doubled to ¥34.8 billion, boosted by the success of "The Super Mario Galaxy Movie."

Software sales for the original Switch were particularly strong, growing 38.6% to 33.81 million units. Sales of games for the newer Switch 2 console also increased by 9.2%. The quarter's best-selling new title was "Tomodachi Life: Living the Dream," which shipped 7.94 million units.

Hardware Sales Cool After Launch Year

While software thrived, hardware sales saw a decline compared to the previous year. The Nintendo Switch 2, which launched in June 2025, shipped 3.82 million units during the quarter. This represents a 34.4% decrease from its launch quarter, a typical trend for consoles after their initial release period. The original Nintendo Switch console also saw sales decrease, shipping 660,000 units. As of June 30, 2026, lifetime shipments for the Switch 2 reached 23.68 million units, while the original Switch has shipped over 156 million units.

Outlook Unchanged

Looking ahead, Nintendo has maintained its full-year forecast for the fiscal year ending March 31, 2027. The company still expects to ship 16.5 million Switch 2 units for the full year. This guidance is considered conservative by some market observers, whose own projections are higher.

Sources

• US Top News and Analysis — Nintendo's fiscal first-quarter profit and revenue beat estimates, despite Switch 2 sales slump
• Nintendo's fiscal first-quarter profit and revenue beat estimates, despite Switch 2 sales slump
• Nintendo (7974) Earnings: Q1 Operating Income Surpasses Estimates While Sales Decline
• Nintendo's Profit Surges 53% on Switch 2 Software Boom, Far Exceeding Expectations
• Nintendo Switch 2 Has Sold 23.68 Million Units Among Strong Profits Growth
• Switch 2 Ships 23.68 Million Units as of June 2026, Switch 1 Ships 156.59 Million – VGChartz
• Nintendo's Q1 2027 net sales down 9% to $3.3 billion – Breaking The News
• Nintendo Q1 sales drop 9.5%; operating profit soars following higher software sales and $300m in US tariff refunds | GamesIndustry.biz
• Nintendo Q1 Results Show Software Growth Outpacing Hardware – TwistedVoxel
• Nintendo's net sales are down, but profits are up in its latest financial report – Gamereactor
• Nintendo tops estimates with US tariff refunds and Switch 2 games – The Business Times

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