Nintendo just delivered one of the most impressive quarterly performances in its storied history. The Kyoto-based gaming giant—creator of iconic franchises like Super Mario, The Legend of Zelda, and Pokémon—saw revenue more than double as its highly anticipated Switch 2 console hit the market with unprecedented force.
For retail investors across APAC watching this legendary company, here's what the numbers really mean.
The Headlines That Matter
Breaking Down the Numbers
Quarterly Revenue Comparison
Metric | Q1 2024 | Q1 2025 | Change |
|---|---|---|---|
Revenue | 246.6B yen | 572.3B yen | +132.1% |
Operating Profit | 54.5B yen | 56.9B yen | +4.4% |
Net Profit | 81.0B yen | 96.0B yen | +18.6% |
Earnings Per Share | 69.53 yen | 82.48 yen | +18.6% |
Revenue vs Net Income Trend
What Drove This Performance?
Switch 2's Blockbuster Launch: Released on June 5, 2025, the Switch 2 achieved something remarkable—selling over 3.5 million units in its first four days alone. This surpassed every previous Nintendo console launch and set the stage for the quarter's stellar performance.
The success wasn't just about hardware. Switch 2 software sales reached 8.67 million units, led by "Mario Kart World" with 5.63 million units sold (including bundled copies).
Q1 2025 Revenue by Region
Geographic Revenue Breakdown: The Switch 2's launch demonstrated Nintendo's global reach, with international sales accounting for the majority of revenue.
Pricing Power: The Switch 2's higher price point compared to its predecessor meant Nintendo earned more revenue per unit sold—a key factor in the dramatic revenue increase without proportional volume growth.
Legacy Platform Resilience: Even with Switch 2's launch, the original Switch continued performing, selling 0.98 million additional units and 24.40 million software units.
The Profit Picture: Why Revenue Surged But Margins Didn't
While Nintendo's revenue more than doubled, operating profit grew just 4.4%. This apparent disconnect tells an important story:
Launch Costs: New console launches typically involve significant upfront costs for production, marketing, and distribution
Product Mix: Higher hardware sales (lower margin) relative to software sales (higher margin) can compress overall profitability
Supply Chain Investment: Nintendo mentioned strengthening production to meet unexpected demand
The 32.3 billion yen extraordinary gain from investment sales also boosted net profit, making the underlying operational performance clearer when viewed through operating profit metrics.
Management's Measured Optimism
Despite the explosive start, Nintendo maintained its full-year forecasts:
Switch 2 Sales Target: 15 million units (unchanged)
Annual Revenue: 1.9 trillion yen
Operating Profit: 320 billion yen
This conservative approach suggests management wants to ensure sustainable supply and avoid overpromising in an uncertain global environment.
Headwinds on the Horizon
Nintendo addressed potential challenges head-on:
US Tariff Impact: While acknowledging "changes in the market environment" including US tariff measures, Nintendo stated these wouldn't significantly impact this fiscal year's earnings forecast.
Currency Fluctuations: Foreign exchange movements affected results, with the company noting currency headwinds in its comprehensive income.
Supply Chain Pressure: Strong demand "surpassing expectations" has prompted production increases, potentially straining manufacturing capabilities.
What This Means for Investors
The Bull Case: Nintendo demonstrated it can still create must-have gaming products that drive massive revenue growth. The Switch 2's launch success validates years of R&D investment and suggests strong consumer demand for premium gaming experiences.
The Reality Check: Hardware launches are cyclical events. The real test will be maintaining momentum through software releases and expanding the user base over the console's lifecycle.
The Long View: Nintendo's ability to repeatedly reinvent itself—from playing cards to arcade games to home consoles to mobile gaming—remains its greatest asset in an evolving entertainment landscape.
Key Dates Ahead
July Release: Donkey Kong Bananza and Super Mario Party Jamboree – Nintendo Switch 2 Edition
August Launch: Drag x Drive and Kirby and the Forgotten Land – Nintendo Switch 2 Edition
October: Pokémon Legends: Z-A – Nintendo Switch 2 Edition plus new hardware bundle
These releases will test whether Nintendo can sustain Switch 2's momentum beyond the initial launch buzz.
The Bottom Line
Nintendo's Q1 results showcase both the power of successful product launches and the cyclical nature of the gaming industry. The Switch 2's record-breaking start provides a strong foundation, but the company's conservative guidance suggests management understands that maintaining this pace requires continued execution.
For APAC investors watching Nintendo, this quarter demonstrates why the company remains a unique player in global entertainment—capable of creating cultural phenomena that translate directly to financial results.
Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Always conduct your own research and consider your risk tolerance before making investment decisions.