Nintendo's hardware sales forecast has been revised downward again, as Switch console and game sales fell short of projections.

For the first nine months of the fiscal year, Nintendo's dedicated video game console business saw a 31.7% year-over-year drop in revenue, reaching 895.5 billion yen (approximately $5.7 billion). This significant decline stems from reduced sales of both the Nintendo Switch console and its software.

Mobile and IP-related income also experienced a downturn, decreasing by 33.9% year-over-year to 49.7 billion yen (approximately $320 million). This is primarily attributed to the challenging comparison with the highly successful 2023 release of The Super Mario Bros. Movie.

Consequently, gross profit decreased by 27.3% year-over-year to 565.5 billion yen (approximately $3.6 billion).

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Nintendo has lowered its financial forecast for the fiscal year ending March 2025 for the second consecutive time. The company anticipates even lower Nintendo Switch hardware sales than previously projected, reducing its forecast by 1.5 million units to 11 million, and software sales by 10 million units to 150 million.

While sales declines were expected for the eight-year-old Switch, the drop is steeper than Nintendo initially anticipated. Nevertheless, the Switch has achieved remarkable success, surpassing 150 million units sold. While overtaking the PlayStation 2's 160 million sales to become the best-selling console of all time may be unlikely, the Nintendo DS's 154 million sales record is within reach.

Nintendo characterized Switch and software sales in its third quarter (ending December 31, 2024) as "stable, considering the platform's eighth year."

Overall sales for the Nintendo Switch family of systems decreased by 30.6% year-over-year to 9.54 million units. Software sales declined by 24.4% year-over-year to 123.98 million units. However, Nintendo highlighted strong sales of new titles: The Legend of Zelda: Echoes of Wisdom (3.91 million), Super Mario Party Jamboree (6.17 million), Mario Kart 8 Deluxe (5.38 million), and Nintendo Switch Sports (2.63 million) during the three-month period. Mario & Luigi: Brothership also sold 1.4 million units.

Super Mario Party Jamboree stands out as a significant success. Within its first 11 weeks (following its October 17, 2024 release), its sales outpaced previous Mario Party titles on the Nintendo Switch (Super Mario Party and Mario Party Superstars).

Crucially, for Nintendo's upcoming Switch 2 release, the number of active Switch players is at an all-time high, with 129 million annual active users in 2024. This indicates sustained player engagement despite the console's age.

Nintendo acknowledged the year-over-year decline in Switch unit sales but emphasized the console's continued appeal, noting that holiday season sales in some weeks even surpassed those of the previous year.

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Given the recent financial report, investors will likely urge a quicker release of the Nintendo Switch 2. Nintendo mentioned upcoming original Switch titles: Xenoblade Chronicles X: Definitive Edition (March 20 release) and Pokémon Legends: Z-A and Metroid Prime 4: Beyond (scheduled for 2025).

The Switch 2 was also mentioned, with Nintendo reiterating its planned 2025 release and referencing the January 16th hardware reveal video. A dedicated Switch 2 Direct is scheduled for April 2nd, promising further details, along with planned hands-on events in various global cities.