Nintendo reports 60% plunge in YoY profit for the first half as the Switch shows its age

It's prime time for Nintendo to launch the Switch 2

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In brief: Nintendo is experiencing a financial hangover after a great run with its Switch console. The company has reported a 60 percent drop in profit for the first half of its fiscal year compared to the same period last year, suggesting the time for the handheld's successor may be near.

Nintendo posted a still-impressive $714.2 million in net profit from April through September, though it missed analysts' expectations of around $885 million for the six-month period.

The company has also lowered its full-year sales forecasts, now projecting 12.5 million Switch units sold by the fiscal year ending in March 2025, down from an initial target of 13.5 million. Software sales forecasts have also been trimmed, with an estimated 160 million game copies expected to be sold, revised from the previous forecast of 165 million.

The slowdown in Switch sales after six highly successful years is likely due to the aging hardware as fans eagerly await Nintendo's next big console. The most recent Switch refresh was an OLED upgrade, released back in 2021.

Meanwhile, Nintendo is working to diversify its revenue streams, expanding into entertainment ventures featuring its iconic characters and franchises.

Just last week, the company launched a mobile app for streaming game soundtracks. Nintendo also announced plans to produce major films based on the Super Mario and Legend of Zelda series, inspired by the success of 2023's Super Mario Bros. movie, which grossed $1.36 billion worldwide. This marked the first video game adaptation to cross the $1 billion milestone.

Nintendo even recently opened a museum dedicated to its vintage gaming history, converting a former playing card factory into an homage to its roots.

Despite the slowdown in hardware sales, some of Nintendo's recent game releases are performing well. The Legend of Zelda: Echoes of Wisdom led with 2.58 million copies sold in its launch month alone. Other million-sellers include remasters of Paper Mario and Luigi's Mansion. Meanwhile, Mario Kart 8 Deluxe continues its reign, adding another 1.37 million copies to its lifetime total.

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It seems the Switch's extensive software library is helping to offset revenue shortfalls as Nintendo prepares for its anticipated next-gen console. While details about the new system remain under wraps, rumors suggest an unveiling by spring 2025. Until then, fans can check out Nintendo's latest hardware offering – a bedside alarm clock.