Nintendo Financial Results Explanatory Material: 2nd Quarter of Fiscal Year Ending March 2025

Nintendo’s financial results for the first half of the fiscal year ending March 2025 reflect a significant year-on-year contraction, driven primarily by the aging lifecycle of the Nintendo Switch hardware and the absence of the exceptional market catalysts that bolstered the previous year’s performance. For the period between April 1, 2024, and September 30, 2024, net sales fell by 34.3% to 523.2 billion yen, while operating profit declined by 56.6% to 121.5 billion yen. This downturn is attributed to a 31.0% decrease in hardware unit sales and a 27.6% drop in software unit sales compared to the same period in the prior year, which had benefited from the release of major titles and the commercial success of The Super Mario Bros. Movie.

Despite the decline in total volume, the company maintained a gross profit margin of 60.8%, an improvement of 1.5 percentage points. This resilience was supported by a shift in the sales mix toward digital content, which accounted for 56.3% of total software sales, and a reduction in the proportion of lower-margin hardware models sold. However, rising research and development expenses, combined with the impact of a depreciating yen on foreign currency-denominated costs, led to a slight increase in selling, general, and administrative expenses.

In response to these performance trends, the company has revised its full-year forecast downward. The annual hardware sales target has been reduced by 1.0 million units to 12.5 million, and the software sales target has been lowered by 5.0 million units to 160.0 million. Consequently, the full-year net sales projection has been adjusted to 1,280.0 billion yen, a 5.2% decrease from the initial forecast. Despite these adjustments, the company has maintained its outlook for ordinary and net profit, as well as its annual dividend forecast, citing stable expectations for non-operating income and exchange rate assumptions.