Nintendo Switch 2 Sales Fall 41% as Higher Prices Add Pressure

Nintendo reported a sharp decline in Switch 2 sales for its fiscal second quarter, as the Japanese gaming company increased console prices while facing rising memory costs. The weaker hardware performance came alongside revenue and net profit that fell short of average analyst forecasts compiled by LSEG.

The company sold 2.67 million Switch 2 consoles during the three months ending Sept. 30, a decrease of 41% compared with the same quarter a year earlier. Sales also fell from the preceding quarter, when Nintendo sold 3.82 million units of its flagship gaming device.

Nintendo raised Switch 2 prices in the United States, Canada and Japan during the quarter. The latest increases followed an earlier price rise in Japan this year. Memory chips, which are a core component of Nintendo's consoles, remain in short supply. That shortage, combined with huge demand, is pushing chip prices up at an unprecedented pace.

Quarterly revenue totaled 448.2 billion Japanese yen, equivalent to $2.8 billion, against an average forecast of 481.37 billion yen. Net profit reached 73.5 billion yen, below the 82.16 billion yen analysts had expected. Despite the sales decline, Nintendo retained its forecast of selling 16.5 million Switch 2 units during the current fiscal year, which ends in March 2027.

The Kyoto-based company has released some successful games this year, including "Tomodachi Life: Living the Dream" and "Pokémon Pokopia." The latter became an unexpected viral hit. Even with those successes, the company's game lineup has lacked major marquee titles.

Investors are looking to the remake of "The Legend of Zelda: Ocarina of Time" to help lift console sales over the coming weeks. Released on Thursday, Nov. 5, the game revisits one of Nintendo's most iconic titles and arrives as the company faces pressure to sustain demand for its hardware.

Serkan Toto, CEO of Kantan Games, told CNBC that the Ocarina of Time remake was Nintendo's only real blockbuster for the fiscal year. He said that was insufficient to satisfy investors, particularly given the console's higher price. Toto also said selling video game hardware was becoming increasingly difficult and that hit games were essential.

Toto called on Nintendo to deliver more major games in the next fiscal year to maintain Switch 2 momentum. The company also has new Pokémon games scheduled for release in 2027.