Nintendo’s earnings report for the second quarter of 2024, which covers April through June, revealed some key insights into the company’s performance amidst a challenging market environment.
Nintendo reported a significant drop in both net sales and profits compared to the same period last year. Net sales for Q2 2024 came in at approximately ¥246.6 billion, a decline of 46.5% year-over-year. Similarly, operating profit plummeted by 70.6% to ¥54.5 billion. The decrease in revenue was largely attributed to a downturn in hardware and software sales, particularly as the previous year’s sales were bolstered by the blockbuster release of The Legend of Zelda: Tears of the Kingdom.
The slowdown in hardware sales was evident as Nintendo sold 2.10 million units of the Switch in this quarter, down 46.3% from the same quarter last year. The Switch OLED model remained the most popular, accounting for the majority of these sales. However, overall demand has decreased, signaling that the console is nearing the end of its lifecycle. This downturn in hardware sales has been mirrored by a similar decline in software sales, which dropped by 41.3% year-over-year.
Nintendo also saw a decrease in digital sales, which fell by 32.6% year-over-year to ¥80.7 billion. This was primarily due to a decline in sales of downloadable versions of packaged software for the Switch. Additionally, revenue from Nintendo’s mobile and IP-related businesses, including the residual impact from The Super Mario Bros. Movie, dropped by 53.8% compared to the same period last year.
Despite these challenges, Nintendo remains optimistic about the future. The company has several high-profile game releases lined up for later in the year, including Super Mario Bros. Wonder and Metroid Prime 4, which are expected to boost both hardware and software sales. Moreover, there is ongoing speculation about potential new hardware announcements, which could reinvigorate interest in the Nintendo brand and drive future growth.