Nintendo Financial Results Explanatory Material: 1st Quarter

The launch of the Nintendo Switch 2 in June 2025 served as the primary catalyst for a significant financial expansion during the first quarter of the 2026 fiscal year. Net sales surged by 132.1% year-on-year to reach 572.3 billion yen, fueled by the rapid adoption of the new hardware. The console achieved record-breaking momentum, moving 3.5 million units within its first four days and surpassing 6 million units in seven weeks. While this hardware-centric growth caused the gross profit margin to compress to 32.3% due to initial manufacturing and distribution costs, the company remains confident in its full-year financial outlook, bolstered by a combined active user base exceeding 100 million players across both the legacy and current-generation platforms.

Strategic efforts are currently focused on balancing the transition between hardware generations. The company is maintaining support for the original Switch while simultaneously driving software engagement on the Switch 2 through exclusive titles and enhanced editions of existing games. Although digital sales experienced a 13.5% year-on-year decline to 69.8 billion yen, this is being offset by a broader corporate strategy to monetize intellectual property beyond gaming. Investments in physical retail expansion, theme park attractions, and film projects are central to this diversification, ensuring that the brand maintains visibility and revenue streams outside of traditional software cycles.

Looking ahead, the software pipeline remains robust, with high-profile releases such as Pokémon Legends: Z-A and Metroid Prime 4: Beyond scheduled for the remainder of 2025, followed by further titles in 2026. These releases are designed to sustain hardware momentum and deepen engagement across the global market. By providing transparent access to historical performance metrics and regional sales data, the company continues to signal a commitment to long-term stability and investor clarity as it navigates the transition into this new hardware lifecycle.