Nintendo’s Q1 revenue for the June quarter fell 10% year over year to ¥518 billion, or roughly $3.3 billion, but still came in above expectations. Operating profit was the standout, jumping 151% to ¥143 billion, nearly twice the consensus estimate, while net income climbed 54% to ¥147 billion. However, about $300 million in refunded U.S. tariffs lowered the cost of sales, giving profitability a significant one time boost⭐

The Switch 2 sold 3.8 million units during the quarter, 34% below the original Switch’s launch-quarter sales. Even so, that puts Nintendo at 23% of its full year FY27 target of 16.5 million consoles. The Switch 2 has now reached an installed base of 23.7 million units globally, compared with 17.8 million units for the original Switch after its first year

Interestingly, the original Switch is still generating strong software sales. Software sales jumped 39% to 34 million units, far ahead of the 9.5 million Switch 2 games sold during the quarter. Tomodachi Life: Living the Dream sold 7.9 million copies, while Pokémon Pokopia reached 1.3 million. The numbers show that backward compatibility is helping Nintendo keep its massive 150M+ Switch user base engaged as players gradually move to the new hardware.

Digital sales nearly doubled to ¥133 billion and now account for 62% of total software revenue. Nintendo’s IP-related revenue also more than doubled to ¥35 billion, helped by The Super Mario Galaxy Movie, which has already crossed $1 billion at the global box office. The stronger mix of software and IP revenue helped gross margin rise 22 percentage points to 54%, although the tariff refund played a major role in that improvement

For now, Nintendo is sticking with its FY27 guidance. The company still expects to sell 16.5 million Switch 2 consoles and 60 million Switch 2 games, while targeting ¥2.05 trillion in revenue and ¥370 billion in operating profit.

The bigger test comes in September, when the Switch 2 price rises to $500 just ahead of the crucial holiday shopping season🍄