Nintendo modified its financial forecast for the fiscal year ending March 2025 after Switch hardware and software sales dropped significantly.
According to the financial report, Nintendo’s net sales decreased by 34.3% for the first half of the fiscal year. Operating profit dropped by 56.6%, ordinary profit decreased by 61%, and profit attributable to parent company owners decreased by 59.9%.
Nintendo’s dedicated video game platform sales dropped by 34.1 per cent year over year, and “a decline in unit sales for both Nintendo Switch hardware and software” was attributed as the cause for this fall. Mobile and IP-related businesses also saw sales decrease by 43% year over year, as income from visual content related to The Super Mario Bros. Movie decreased.
Nintendo’s gross profit declined 32.6% year-on-year. However, the gross profit margin increased by “1.5 percentage points year-on-year to 60.8%.” Additionally, SG&A expenses increased by 2.2% year-on-year, and the ratio of SG&A expenses to sales increased by 13.4 percentage points to 37.5% year-on-year.
Due to the fall, Nintendo has decided to revise its financial forecast for the fiscal year ending March 2025. The new estimates are 1,280.0 billion yen in net sales and 360.0 billion yen in operating profit. The ordinary and net profit forecast will not change, staying at 420.0 billion yen and 300.0 billion yen, respectively. Hence, the forecasted annual dividend will remain at 129 yen per share.
Nintendo has also modified the unit sales forecast for Nintendo Switch hardware and software. The forecasted unit sales for Switch hardware have been decreased by 1 million units and software by 5 million units, with the new numbers being 12.50 million and 160.00 million units, respectively.
The Nintendo Switch has sold over 146 million units. However, it suffered from a 31.0% drop year-on-year in hardware (4.72 million units) and a 27.6% drop year-on-year in software (70.28 million units). Also, Nintendo stated that the plan for Switch 2’s announcement before April 2025 remains unchanged. What are your thoughts on Nintendo lowering its annual forecast? Let us know in the comments or our new community forum!
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