Nintendo’s 1st half sales drop 34% as Switch shows its age

Nintendo reported that sales for the first half of 2024 fell 34.1% to 523.2 billion yen ($3.43 billion) as it saw a slowdown in sales for Nintendo Switch hardware and games.

And in the mobile and movie-related intellectual property business, sales decreased by 43.3% year-on-year to 31.2 billion yen ($204.8 million), mainly due to the decrease in income from visual content related to The Super Mario Bros. Movie.

Meanwhile, R&D expenses went up 15% in the half year — perhaps a sign that the company’s next-generation game console is coming soon. (It’s expected in 2025). Foreign currency expenses were also higher. Overall, net profit was 108.6 billion yen ($713 million, down 59.9%).

As a result of the weaker quarterly results, Nintendo downgraded its forecast from 1,350 billion yen in the fiscal year ending March 31, 2025 to 1,280 billion yen, down 5.2%. It also expects net profit to be flat.

Instead of selling 13.5 million Nintendo Switch units, Nintendo now expects to sell 12.5 million, down 7.4%, in the fiscal year. And it expects to sell 160 million units of software, down 3% from the earlier expected 165 million units.

So far in the half year, Nintendo has sold 4.72 million Switch devices (down 31% from a year ago) and 70.28 million software copies (down 27.6% from a year ago).

Nine titles have sold more than a million units in the first half, including 2.58 million for The Legends of Zelda: Echoes of Wisdom, 2.31 million for Mario Kart 8, and 1.94 million for Paper Mario: The Thousand-Year Door.

Digital sales for the first half of the fiscal year decreased by 26.5% year-on-year to 159.9 billion yen, but as a proportion of total software sales for the dedicated video game platform, digital sales increased 6.1 percentage points to 56.3%.

Digital sales declined year-on-year mainly due to a decrease in sales of downloadable versions of package software and add-on content for Nintendo Switch.