Nintendo Switch 2 Shipments Fall 41%, But Its Software Sales Climb 26%

Nintendo released its Q3 earnings data, revealing updated information on console shipments, including the original Switch and the updated Switch 2 console. During the fiscal second quarter, which Nintendo defines as the period between July and September instead of the traditional Q3, the company shipped 2.67 million Nintendo Switch 2 consoles. This marks a decrease of 41% from 4.54 million units a year earlier and a 30% decline from 3.82 million units in the April-June quarter. The original Switch shipped 610,000 units, down 33% year-on-year. While hardware sales have decreased, the company is relying on its software unit sales to compensate.

Switch 2 software sales rose 26% to 15.03 million units, led by new releases like Splatoon Raiders, which achieved 2.42 million sales, and Fire Emblem: Fortune’s Weave, with 1.34 million sales. The original Switch software reached 31.92 million units, bolstered by Rhythm Heaven Groove, which sold 2.89 million units. Digital sales grew 37% year-on-year to approximately $734 million (116.9 billion yen), making up 59.8% of software sales. Overall, quarterly revenue was about $2.81 billion (448.2 billion yen), and net profit fell 29% to approximately $461 million (73.5 billion yen), both below analyst expectations. Nintendo maintained its full-year forecast of 16.5 million Switch 2 units and about $1.95 billion (310 billion yen) in net profit.

Declining hardware sales are attributed to supply chain problems, which have led Nintendo to increase pricing on its consoles a few times in the past. Sourcing memory and storage became notoriously difficult, so the company resorted to price hikes, which might not be entirely over as memory supply continues to be a problem. However, strong software sales are helping the company stay profitable despite the challenges in hardware supply.