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Freedom251 › Blog › Earnings

Nintendo Reports 9.5% Q1 Revenue Decline as Profit Rises

By Freedom251 Team · · 3 min read

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Nintendo Co., Ltd. reported net sales of ¥517.8 billion for fiscal 2027’s first quarter, down 9.5% year over year. The quarter covered April 1–June 30, 2026; the results were issued August 6. Operating, ordinary and net profit all rose, so the revenue decline does not describe the whole quarter—and it is not, by itself, a measure of Nintendo’s share-price performance.

What Nintendo reported for fiscal Q1 2027

The figures below are Nintendo’s reported comparisons with the same quarter a year earlier, not external market estimates. Fiscal Q1 here means April through June 2026, not January through March.

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Measure Q1 result Year-over-year change
Net sales ¥517.8 billion — Nintendo Co., Ltd., 2026 Down 9.5% — Nintendo Co., Ltd., 2026
Operating profit ¥142.5 billion — Nintendo Co., Ltd., 2026 Up 150.5% operating-profit increase — Nintendo Co., Ltd., 2026
Operating margin 27.5% Up 17.6 percentage points
Ordinary profit ¥206.1 billion Up 115.1%
Net profit (profit attributable to owners of parent) ¥147.4 billion Up 53.5%

Revenue is the sales line; the profit measures are what remains after costs and other items are accounted for. Nintendo’s results therefore show lower sales alongside sharply higher operating profit and higher ordinary and net profit. These are company results, not a recommendation to buy or sell Nintendo shares.

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Why revenue declined while profit increased

Lower hardware sales weighed on the main platform business

Dedicated video game platform sales fell 13.1% to ¥483.0 billion. Nintendo said the decline was primarily due to lower hardware unit sales, despite increased software unit sales and yen depreciation. This category includes hardware, accessories and amiibo, packaged and downloadable software, download-only software, add-on content, and Nintendo Switch Online.

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Nintendo Switch 2 hardware sell-in was 3.82 million units, down 34.4%, while Switch 2 software sell-in was 9.46 million units, up 9.2%. These are group sales to outside entities—including direct-to-consumer website sales and downloadable software—not a count of purchases by individual consumers. The comparison also matters: the prior-year Q1 was Switch 2’s launch quarter.

IP-related income grew

IP-related income and other reached ¥34.8 billion, up 107.4% IP-related-income increase — Nintendo Co., Ltd., 2026. Nintendo includes movie and video income, smart-device content, royalties, and official-store merchandise in this category. It cited growth in movie and video income related in part to The Super Mario Galaxy Movie.

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Foreign exchange and refunds affected the reported figures

Nintendo reported that exchange-rate changes had a positive ¥39.0 billion effect on net sales. The company also said gross profit rose 52.0% to ¥281.3 billion and gross margin increased 22.0 percentage points to 54.3%. It attributed the margin change to factors including a greater software share of sales and refunds of U.S. tariffs imposed under IEEPA that had previously been recorded as cost of sales.

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Nintendo disclosed an approximately US$300 million reduction in cost of sales in connection with those tariff refunds. The tariffs were primarily borne by the company rather than passed on to consumers through product prices. That cost reduction helps explain why profit could rise even as reported net sales fell; it did not reverse the revenue decline.

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Software and digital sales trends

Digital sales were ¥132.7 billion, up 90.0%, and represented 61.5% of software sales in Nintendo’s dedicated video game platform business. Nintendo classifies revenue from bundled software as hardware sales, not as software or digital sales. That accounting treatment is important when comparing digital sales with unit-sales trends or the total platform category.

What Nintendo expects for the full fiscal year

Nintendo left its consolidated forecast unchanged from May 8, 2026. Its forecast for the fiscal year ending March 2027 is shown below. These are management forecasts, not actual results or guarantees.

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FY2027 forecast measure Forecast
Net sales ¥2,050.0 billion
Operating profit ¥370.0 billion
Ordinary profit ¥430.0 billion
Net profit ¥310.0 billion

The forecast assumptions include tariff rates in effect at the end of March 2026, approximately ¥100.0 billion of cost-of-sales impact from rising component prices—particularly memory—and tariff measures, and exchange rates of ¥150 per U.S. dollar and ¥175 per euro. Nintendo’s explanatory material stated: “The consolidated financial forecast for the fiscal year ending March 2027 remains unchanged from the forecast announced on May 8, 2026.”

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When Nintendo reports next

Nintendo’s investor relations calendar listed six-month earnings for November 5, 2026, following the August 6 three-month report. Scheduled dates can change, so check the Nintendo Investor Relations Information page for the current calendar.

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Sources: Nintendo FY2027 Q1 Financial Results Explanatory Material, issued August 6, 2026; Nintendo Investor Relations Information; and Associated Press, “Japanese game company Nintendo reports a jump in profit on the popularity of its Switch 2,” August 6, 2026.

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Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

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