Nintendo Q2 Operating Profit Falls 16% Under Dual Pressure from Storage Costs and Switch 2 Sales
nashnova research
Nintendo's second-quarter operating profit dropped 16% year-on-year to ¥73.9 billion, with revenue declining worse than analysts expected; rising memory-chip costs and slowing Switch 2 sales are now pressing on its full-year profit target.
How bad was this quarter?
Operating profit came in at ¥73.9 billion (about $468 million), down 16% year-on-year; revenue fell 15%.
Analysts had forecast roughly flat profit. The miss was significant.
This means → the market expected Nintendo to hold the line, and it didn't — the expectation gap is the sharpest signal in this report.
Why did costs jump?
The AI boom has driven up prices of memory chips — the core components that store data inside a game console — and Nintendo has factored roughly ¥100 billion in higher parts costs, including U.S. tariffs, into its full-year forecast.
To pass on the hit, Nintendo raised the U.S. price of Switch 2 by $50 to $499.99 on September 1.
In plain terms = AI made chips more expensive, Nintendo's parts bill went up, and American consumers are being asked to cover the difference — but a higher sticker price could itself weigh on sales.
How is Switch 2 selling?
First-half unit sales totaled 6.49 million, down 37% year-on-year.
In the U.S., September unit sales fell 14% and dollar sales fell 12% — while overall U.S. game-hardware spending grew 12% in the same period.
This reflects a problem specific to Nintendo, not the industry: the company is losing share in a market that is actually expanding.
Can the holiday season turn things around?
Nintendo recently launched a remaster of *The Legend of Zelda: Ocarina of Time*, betting on a classic franchise to drive year-end demand.
But the original is nearly thirty years old, and it will compete head-to-head with *Grand Theft Auto 6* (GTA 6) from November 19 — a title the market views as the year's biggest release, likely to absorb global entertainment spending and attention.
This means → the holiday hand favors Nintendo's rivals: its own card plays on nostalgia, while the competition holds a once-in-a-decade blockbuster.
Can the full-year target still be met?
Management kept its guidance for 3% full-year profit growth unchanged, but Hideki Yasuda, senior analyst at Toyo Research, said: "I am not optimistic that holiday-season sales will beat last year."
He added that memory-cost pressure will likely persist into the first half of next fiscal year.
In plain terms = holiday sales performance and the trajectory of memory-chip costs are the two tests the market will use to judge whether that 3% target is achievable — and right now, neither looks encouraging.
市场有风险，内容仅供研究参考，不构成投资建议。