Nintendo posts 49.1% operating profit jump as Switch 2 hardware sales fall 37.4%

Published 5 Nov 2026 · Updated 6 Nov 2026 · Games Atlas Editorial · Financial Results · Companies: Nintendo, Sony Group, Microsoft

Games Atlas summary: Nintendo's H1 operating profit rose 49.1% to 216.5 billion yen. Switch 2 hardware sales fell 37.4% YoY to 6.49 million units. Software volume, digital sales and tariff refunds carried margins through the hardware slump. Switch 2 lifetime sales reached 26.35 million units, ahead of the original Switch's pace.

Software attach rates cushion the hardware slump

• Switch 2 software units rose 18.8% YoY to 24.49 million in H1.
• Digital game sales surged 60.5% YoY, Nintendo's highest-margin revenue line.
• Lifetime Switch 2 software reached 73.21 million copies.
• The original Switch has sold 157.2 million units and 1.593 billion software copies lifetime.
• Tomodachi Life: Living the Dream alone sold 8.81 million units.
• Splatoon Raiders, the period's only Switch 2 exclusive, sold 2.42 million units.
• Fire Emblem: Fortune's Weave, released in September, sold 1.34 million units.
• Star Fox, released in June, sold 1.17 million units.

Tariff refunds and currency weakness buffer profit

• Nintendo booked about $300 million in US tariff refunds as a cost-of-sales reduction.
• That credit helped lift H1 operating profit 49.1% to 216.5 billion yen.
• A weak yen partly offset a 15.3% decline in overall Switch business sales.
• Nintendo said it absorbed most tariff costs instead of raising consumer prices.
• Q2 operating profit fell 16% to 73.9 billion yen, missing analyst expectations.
• Q2 revenue of 448.2 billion yen trailed the 481.37 billion yen consensus.
• Q2 net profit of 73.5 billion yen trailed the 82.16 billion yen consensus.

Hardware economics remain the structural risk

• Nintendo raised the US Switch 2 price by $50 to $499.99 on Sept. 1.
• Furukawa cited memory costs, exchange rates and energy prices behind the May 2026 announcement.
• Sony and Microsoft also adjusted hardware prices during the same period.
• Q2 Switch 2 units fell 41% YoY to 2.67 million.
• That figure also trailed the 3.82 million units sold in the June 2026 quarter.
• Full-year guidance bakes in a 100 billion yen hit from memory and tariff costs.
• Nintendo held its forecast of 16.5 million Switch 2 units for the year to March 2027.
• "The company can secure enough memory to avoid another price hike." - Shuntaro Furukawa, Nintendo President
• Analyst Serkan Toto said Nintendo lacks a major blockbuster until the next fiscal year.
• Grand Theft Auto VI launches November 19 without a Switch 2 version.

What this means

• For Publishers & Developers: Schedule Switch 2 holiday releases into the November window while multiplatform players chase the rival-console mega-launch.
• For Investors & VC: Underwrite Switch 2 studio deals on installed-base attach and digital mix over new-console sell-through.
• For UA & Marketing: Shift Switch 2 launch budgets toward eShop placements and retargeting of existing owners.

Sources

• Nintendo Q2 earnings miss as Switch 2 sales fall after price hikes (qz.com)
• Nintendo Officially Addresses Switch 2 Price Hike Concerns (polygon.com)
• Nintendo game sales surge thanks to Tomodachi Life: Living the Dream, but Switch 2 hardware suffers big decline | Eurogamer.net (eurogamer.net)
• Japanese video game company Nintendo reports rising profit, falling sales | The Independent (the-independent.com)
• Nintendo stock dips after memory chip shortage and lack of recent hits takes toll on earnings - GamesBeat (gamesbeat.com)
• Switch 2 Hits 26 Million Units: The Story Behind Nintendo's Holiday Season Bet and Its Memory Market Gamble (techtimes.com)
• Nintendo maintains hardware forecast as Switch 2 sales begin to decline (verticalslice.news)