Nintendo has recently reviewed its financial forecasts for the fiscal year 2025, announcing several significant downward revisions to its expected revenue and profits. On February 4, 2025, the company revealed adjustments to its consolidated financial performance estimates due to disappointing sales figures and changes in currency exchange rates.
The key figures from Nintendo’s revised forecasts show a stark decline: the expectation for net sales was adjusted from ¥1.28 trillion to ¥1.19 trillion, representing a 7.0% drop. Operating profit, previously forecasted at ¥360 billion, has now been revised down to ¥280 billion, marking a decrease of 22.2%. Similarly, recurring profit has been lowered from ¥420 billion to ¥370 billion—an 11.9% drop—while net profit is anticipated to fall from ¥300 billion to ¥270 billion, which is about 10.0% lower than previous expectations.
This revision is largely attributed to the sales performance during the third quarter of fiscal year 2025 and the revised outlook for the future. The management noted, "We have revised our full-year performance forecasts based on third quarter sales and expectations going forward." The company's alterations reflect the changing market conditions and consumer behaviors, especially following the announcement of its anticipated successor to the Nintendo Switch, termed the Nintendo Switch 2.
Another notable change highlighted by Nintendo is the assumption of the foreign exchange rates, which impacts the revenue calculations directly. The exchange rate for the US dollar has been adjusted from ¥140 to ¥150, indicating the company's concerns about strengthening currency fluctuations. Meanwhile, the rate for the euro remains unchanged at ¥155.
The revisions to the forecasts have also triggered changes to Nintendo's dividend policy. The company has reduced its expected end-of-term dividend from ¥94 per share to ¥81 per share, anticipating an annual dividend of ¥116 per share. This news may concern investors who have relied on past performances and dividends as indicators of the company’s health and its commitment to shareholder returns.
With this being the first financial report since the announcement of the Nintendo Switch 2, all eyes were on the sales figures for the existing Switch model and new game titles such as Super Mario Party Jamboree and Mario & Luigi RPG: Brotherhood!. Experts predict these product sales will be significant influences on the company's recovery strategies and future financial forecasts.
Industry analysts are particularly focused on how the announcement of the Switch 2 may realign consumer purchasing behaviors. Given the competitive video game market, which constantly evolves with new releases and technology, Nintendo's strategic decisions will play a pivotal role as it seeks to maintain its position against rivals.
Overall, Nintendo's recent financial forecasts indicate caution as the company progresses through fiscal year 2025. Observers will be closely monitoring how these changes influence the company’s operations, investor sentiment, and competitive stance within the broader gaming industry. With the shift to the new console generation approaching, how well Nintendo navigates these challenges will determine its market performance as it heads toward the end of the fiscal year.