Nintendo's Half-Year Profit Rises 11% to $1.4 Billion as Sales Slip

Nintendo posted a 220.9 billion yen ($1.4 billion) net profit for April through September, up 11% from nearly 199 billion yen a year earlier, even as sales fell 12% to 966 billion yen, the Kyoto-based company reported Thursday.

The profit gain came despite shrinking revenue. Investors read the numbers as a sign of margin discipline. Nintendo stock rose 6.3% Thursday in Tokyo.

What sold during the six months?

Hardware tells a split story. Nintendo sold 1.27 million original Switch consoles and 6.49 million Switch 2 machines during the six-month period, the company said. The Switch 2, launched with hours-long lines in Tokyo, has become the volume engine.

Software carried weight too. The company said new releases "Star Fox" and "Splatoon Raiders" sold briskly, while earlier titles such as "Mario Kart World" stayed in demand.

Digital sales, including proceeds from downloadable games, continued to surge, Nintendo said. A film added a second income stream: "The Super Mario Galaxy Movie," a 2026 animation, also boosted the bottom line.

Nintendo did not break down quarterly details.

Why hold the forecast steady?

Nintendo kept its full-year projections unchanged. It still expects 310 billion yen in profit through March 2027, down nearly 27% from the previous fiscal year, on 2 trillion yen in sales, down 11%.

The forecast implies a weaker second half than the first. That calculation rests on timing. Companies like Nintendo tend to record their biggest sales during the present-giving Christmas and New Year's seasons, and the company has left room for that surge while pricing in cost pressure.

The pressure is real. Like other technology companies, Nintendo faces a computer chips crunch and surging prices driven by the recent global boom in artificial intelligence, which has squeezed consumer tech chip supply.

What does the margin gap mean?

The mechanics of the half-year are simple to state. Revenue fell 12%, yet profit rose 11%. That gap points to a richer sales mix: downloadable games carry higher margins than cartridges and consoles, and box-office income from the Mario movie adds revenue with no hardware attached.

The mix shift matters for the forecast. If digital sales keep surging and the film performs, Nintendo could beat its 310 billion yen target. If chip shortages push hardware costs higher into the holiday quarter, the guidance cut it already baked in — nearly 27% — may prove optimistic rather than conservative.

The market rendered its own verdict on Thursday. A 6.3% single-day gain in Tokyo says investors weight the profit beat and the Switch 2's 6.49 million units more heavily than the 12% revenue decline. The next test is the Christmas quarter, where Nintendo's year is traditionally won or lost.