Nintendo delivered a sharp jump in profits after the strong launch of its Switch 2 console, but rising memory chip prices linked to the global AI boom could weigh on costs ahead. The new console became the world’s fastest selling games system after debuting last summer, driven by strong fan demand and holiday season sales.
The Switch 2 follows the original Switch, which surged in popularity during the pandemic as titles like “Animal Crossing” became global hits during lockdowns. Both consoles are hybrid devices that can be played on the go or connected to a television. For the April to December period, Nintendo reported net profit growth of 51.3% year on year to 358.9 billion yen or $2.3 billion. Revenue nearly doubled to 1.9 trillion yen. Despite the strong performance, Nintendo kept its full year Switch 2 sales target unchanged at 19 million units and maintained its net profit forecast of 350 billion yen. “Nintendo Switch 2 got off to a good start following its launch on June 5 and unit sales continued to grow through the holiday season,” the company said.
Nintendo sold nearly 17.4 million Switch 2 units during the 9 month period. “Maintaining momentum is certainly a big focus for Nintendo,” said Krysta Yang of a Nintendo focused podcast, speaking to a news agency. She noted that a limited pipeline of major first party games in the coming months could slow growth, though third party titles such as “Resident Evil Requiem” may help. Nintendo said it plans to release “Mario Tennis Fever” this month and “Pokemon Pokopia” in March. While the company is expanding into movies and theme parks, gaming consoles remain central to its business. The original Switch has now sold 155.37 million units, overtaking the Nintendo DS to become the company’s best selling hardware.
However, higher memory chip prices pose a challenge. These chips are used in consoles, smartphones and laptops, and prices are rising as manufacturers prioritise advanced memory for AI data centres. “Nintendo and other console manufacturers are publicly keeping quiet about the impact of the shortage,” gaming industry consultant Serkan Toto told a news agency. He added that “users can forget the past when consoles always became cheaper in tandem with component costs falling over time”, warning that price increases could arrive in 2026. Yang said a Switch 2 price hike “is not out of the question”, but added Nintendo “would likely exhaust all other options” first.
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