Nintendo defends Switch 2 sales slump, cites Zelda launch and price hikes as key factors

Key points

• Switch 2 sales fell 41% year-over-year to 2.67 million units in the quarter ending September 30, down from 3.82 million in the previous quarter.
• Nintendo raised prices in Japan in May and in other regions in September due to soaring memory chip costs, which analysts link to AI-driven demand.
• President Shuntaro Furukawa characterized the post-price-hike slowdown as a 'natural stabilization' after an unprecedented adoption pace, noting that bundles mitigated the impact outside Japan.
• The Legend of Zelda: Ocarina of Time remake and the 40th Anniversary Edition console launched on November 5, receiving a 'very strong start' according to Nintendo.
• Nintendo maintained its fiscal year target of 16.5 million units, requiring 10.01 million sales in the second half, despite missing revenue and profit estimates for the quarter.

Background

Nintendo’s Switch 2 launched in June 2025, and the console had previously seen a 34.4% year-over-year decline in the first quarter. Recent archive coverage noted that the Zelda remake triggered massive retail queues and outperformed Grand Theft Auto VI in pre-orders, positioning it as a critical strategic release to counter hardware sales declines and rising memory costs.

How outlets are covering it

Nintendo’s leadership framed the sales dip as a temporary stabilization following a rapid initial uptake, emphasizing that software bundles softened the impact of price hikes in international markets. In contrast, CNBC and Yahoo Finance highlighted the severity of the decline, noting that the 41% drop was steeper than the 34.4% seen in the first quarter. Analysts like Serkan Toto of Kantan Games argued that the Ocarina of Time remake is insufficient to satisfy investors given the console’s increased cost, while Yahoo Finance noted that the entire industry, including Sony and Microsoft, is struggling with memory-driven price hikes. Nintendo’s financial results missed consensus estimates for revenue and net profit, with operating margins falling to 16.5% from 27.5% in the previous quarter.

Why it matters

The sharp decline in hardware sales and missed financial targets signal that Nintendo’s strategy to offset memory cost increases through price hikes is straining consumer demand. The success of the Zelda remake and the 40th Anniversary bundle will be critical in determining whether Nintendo can meet its annual shipment goals and maintain market share against competitors facing similar supply chain pressures.

What to watch

Nintendo will monitor sales trends over the coming weeks to assess the impact of the Zelda launch and holiday season promotions. The company must sell 10.01 million units in the second half of the fiscal year to meet its 16.5 million unit target. Future releases, including new Pokémon games in 2027, will also be crucial for sustaining momentum.