Nintendo reported a massive 86% year-over-year revenue jump for its fiscal third quarter, driven by the record-breaking launch of its Switch 2 console. The company confirmed it is maintaining its full-year sales forecast of 19 million units for the fiscal year ending March 2026, having already sold 17.37 million units through December.
Financial Performance: For the quarter ended December 31, revenue reached 806.32 billion yen (approximately $5.2 billion), while net profit rose 24% to 159.93 billion yen. Operating profit for the quarter increased 23% to 155 billion yen. For the six-month period, operating profit hit ¥300 billion (~$1.92 billion) and net profit reached ¥359 billion (~$2.3 billion), marking the company's 7th and 3rd best results in the last 25 years, respectively.
Console Sales Momentum: The Switch 2 has become Nintendo's fastest-selling console ever. Sales in the critical December holiday quarter alone reached 7 million units. Market research firm Circana confirmed it was the best-selling console in the U.S. during December, and it set a new record as the fastest-selling video game hardware device in U.S. history, surpassing the PlayStation 4's launch record.
Game Sales Driving Hardware: Strong game titles have been instrumental. Mario Kart World has sold approximately 14 million copies since the console's launch, while Donkey Kong Bananza has sold 4.25 million units. Nintendo plans to release Mario Tennis Fever in February and Pokémon Pokopia in March to maintain momentum.
Stock and Profitability Concerns: Despite the strong sales, Nintendo's stock price has fallen more than 30% since its peak above 14,000 yen in August 2025, following the console's June launch. Investors are concerned about sustainability and the impact of rising memory chip prices, a key console component, on future profitability. President Shuntaro Furukawa stated the price surge isn't impacting the current fiscal year's results, but acknowledged long-term pressure if prices continue rising.
Analyst Perspectives: Analysts remain largely positive. Jefferies analyst Atul Goyal noted Nintendo's "sizable inventories and long-term contracts will shield it" for several quarters. Goldman Sachs analyst Minami Munakata said concerns about Switch 2 profitability are overdone, pointing to Nintendo's policy of not selling hardware at a loss. The console is priced at $449.99 in the U.S. and 49,980 yen (~$320) in Japan.
