Nintendo released its second-quarter earnings report today, and it’s a fairly mixed bag. Despite strong software sales and an 87.9 percent increase in “IP related income,” hardware sales of both the Nintendo Switch and the Nintendo Switch 2 are down 37.4 percent and 32.7 percent, respectively.
Nintendo’s total “unit sales of software” saw a healthy increase in Q1-Q2 2027, with Switch 2 software sales up 18.8 percent on 2025 and Switch software sales up 6.8 percent. There are some surprise hits on the software front, with Tomodachi Life: Living the Dream shipping an enormous 8.81 million units and Rhythm Heaven Groove hitting 2.89 million units across the six-month period.
However, Nintendo’s report states that “the continued weakness of the yen” has led to overall sales in its “dedicated video game platform business” declining by 15.3 percent year-on-year. Likewise, both Bloomberg and Reuters note that Nintendo’s operating profit fell by 16 percent in its second fiscal quarter, although this was a figure Nintendo had been expecting.
Although Bloomberg’s report states that Nintendo’s “bigger-than-expected 15 percent decline in sales” is a cause for concern, with Morningstar’s equity analyst saying that it is proof that “investors have cooled on the Switch 2 platform,” the company’s shares remain steadfast. In fact, as of writing, Nintendo Co Ltd’s share price is up 6.3 percent following its quarterly earnings report.
This may partially be due to a strong gross profit report, up 22.1 percent in FY2027 Q1-Q2 versus the year before. Nintendo’s report partially attributes this to both its “solid software sales” and the “refunds of U.S. tariffs imposed under IEEPA that had previously been recorded as cost of sales.”
It’s important to note that while analysts believe Grand Theft Auto VI’s lack of release on Nintendo Switch platforms will make a sizable dent in the company’s profits across the Christmas period, Nintendo’s Q1-Q2 2027 report does not include the software sales of The Legend of Zelda: Ocarina of Time remake.
