Nintendo Stock: Q3 Revenue Jumps 86% on Console Demand

TLDR

• Nintendo holds firm on 19 million Switch 2 sales target for fiscal year ending March 2026
• Company sold 17.37 million Switch 2 units through December with 7 million in Q4
• Revenue surged 86% while profit climbed 24% in fiscal third quarter
• Stock down 30% from August peak despite fastest console launch in company history
• Memory chip price increases not affecting current earnings but pose future risk

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Nintendo released quarterly earnings Tuesday showing the Switch 2 console continues to perform well despite investor worries. The company kept its sales forecast at 19 million units for the fiscal year ending March 2026.

Sales have reached 17.37 million Switch 2 units since the June launch. The December quarter alone accounted for 7 million units. This performance makes the Switch 2 Nintendo’s fastest-selling console ever.

Nintendo Co., Ltd., NTDOY

The fiscal third quarter ended December 31 delivered strong results. Revenue hit 806.32 billion yen ($5.2 billion), up 86% year-over-year. Net profit reached 159.93 billion yen, a 24% increase from the prior year.

Strong Game Sales Support Hardware

Popular titles are driving Switch 2 adoption. “Mario Kart World” has sold approximately 14 million units since launch. “Donkey Kong Bananza” reached 4.25 million units.

The company has two major releases coming soon. “Mario Tennis Fever” launches in February. “Pokémon Pokopia” arrives in March.

“The Super Mario Galaxy Movie” hits theaters in April. The 2023 Super Mario movie boosted original Switch sales significantly when that console was already six years old. Nintendo expects similar results for Switch 2.

Share Price Decline and Cost Pressures

Nintendo shares peaked above 14,000 yen in August after the Switch 2 launch. The stock has since dropped over 30% from that high.

Memory chip prices have surged due to AI investment demand. These chips are essential console components. President Shuntaro Furukawa acknowledged the price increases but said they aren’t hurting current fiscal year results.

Long-term price increases could squeeze profitability. However, analysts say Nintendo has protection other companies lack.

The Switch 2 costs $449.99 in America. Japanese customers pay 49,980 yen ($320). The pricing difference reflects inflation and regional market conditions.

Operating profit jumped 23% to 155 billion yen in the latest quarter. Nintendo projects annual operating profit of 370 billion yen, nearly one-third higher than last year.

Some investors worry about the games lineup. The original Switch benefited from “The Legend of Zelda” series and other major franchises. Toto said Switch 2 “sold like hotcakes over the holidays” despite lacking exclusive blockbusters.

The company sold 17.4 million Switch 2 units in the nine months through December, covering the crucial holiday shopping season.

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