Switch 2 Sales Slide in Q2 Ahead of Vital Holiday Targets

Nintendo released its second-quarter results for the current fiscal year, and the report shows a clear divide between hardware and software. Switch 2 shipments fell compared with the same period last year, while the game lineup continues to post solid numbers.

The quarter covers July, August and September. Nintendo's fiscal year runs from April to March, so April, May and June are already in the books. The comparison is a hard one. The Switch 2 launched in June, which made last year's July to September stretch its first full quarter on the market.

Hype was high, and Nintendo shipped a large number of consoles early, so this year's figures look weaker by comparison.

Several financial institutions pointed to the decline, not only in hardware but also in operating income and revenue. Nintendo's investor relations page lists lifetime Switch 2 sales at 26.35 million units. In the latest quarter, the company shipped 2.67 million units, a 41% decrease from the same quarter a year earlier.

The Switch 1 moved about 610,000 units, down 32%, and now sits at 157.2 million. It is closing in on 160 million and is within range of challenging the PlayStation 2's lifetime total. Even with the quarterly drop, the Switch 2 remains about 6.5 million units ahead of the Switch 1 when the two are lined up from their respective launches.

Holding that lead through the holiday season will take some effort. The newer console costs noticeably more than its predecessor, and it currently sells for $500. On the software side, the company lists the top sellers on its website. Mario Kart World leads with 16.48 million copies, which is more than half of the Switch 2 user base.

Bundling Mario Kart World with the console explains much of that figure. Donkey Kong Bananza follows at just over 5 million. Pokémon Legends: Z-A, counting only the Switch 2 version, is level with Pokémon Pokopia, and a Switch 1 version of Z-A also exists. Splatoon Raiders has sold 2.42 million copies, and Kirby Air Riders sits just under 2 million.

Newer releases like Fire Emblem and Star Fox are also adding to software totals.

Fire Emblem: Fortune's Weave came out in mid-September, and the totals run through September 30, so its 1.34 million copies cover a little over two weeks. Super Mario Party Jamboree – Nintendo Switch 2 Edition sits at 1.28 million. Star Fox also crossed one million units.

The remake is not believed to have been costly to produce so that those early results may give Nintendo more confidence in the Star Fox franchise. Industry speculation suggests another Star Fox game is in development, possibly closer in style to Star Fox Adventures.

Because these releases arrived early in the Switch 2 lifecycle, they are expected to keep selling over time. Two Switch 1 titles also stand out. Tomodachi Life: Living the Dream has sold 8.81 million copies, and Rhythm Heaven Groove has reached 2.89 million. Both are believed to have had relatively modest development costs, which would make them very profitable for Nintendo.

Overall, software, led by Mario Kart World, is performing well, while hardware is where Nintendo has ground to cover. The company's forecast for Switch 2 hardware remains at 16.5 million units for the fiscal year. That means roughly another 10 million systems need to ship in the second half, which makes the holiday season especially important.

Nintendo is leaning heavily on The Legend of Zelda: Ocarina of Time to deliver.

The company appears to have plenty of Switch 2 units ready for the release, and the holiday quarter is expected to be larger than last year's, which is what Nintendo needs. Zelda has also been generating a lot of buzz online. With the console at $500, hardware is getting harder to move.

President Shuntaro Furukawa has said the company is not considering another price increase, following the one announced earlier this year. He also said there has been no major change in the memory situation and that Nintendo is in a position to secure sufficient quantities.

That appears linked to Nintendo having already lined up the memory it needs for this fiscal year, shielding it from memory price hikes for now. Another detail comes from an industry tracker that follows the company: Nintendo's inventory is at a record level. In just three months, its inventory value rose by as much as $5.15 billion.

That figure covers everything needed to build a console, including chips and other components, all grouped into one total. The tracker put the numbers into a bar chart and described the jump as astronomical. The move appears to respond to uncertainty over memory prices.

Nintendo knows what conditions look like today but not what they will look like later, so it is stocking up now.

If it needs to raise prices in the next fiscal year, it can reassess when the next round of orders comes. Building up supplies also puts the company in a position to weather potentially soaring memory prices through 2027. With a 3D Mario and new mainline Pokémon games on the way, Nintendo has a lineup that should support Switch 2 sales.

Nintendo still has work to do over the rest of the fiscal year. Zelda is off to a strong start, and Metroid Ravenous arrives early next year. Kirby is also on the schedule, though it may land outside the current fiscal year. Nintendo could still reveal more titles heading into 2027. For now, the company looks well placed for a strong third quarter as the holiday season carries into the new year.