Nintendo's stock price surged by 350 yen (2.91%) to 12,370 yen on May 9, 2025, following the company's announcement of an expected 8% increase in operating profit for the fiscal year ending in March 2026. According to the Japanese game industry, Nintendo revealed on May 8 that its consolidated operating profit is projected to reach 300 billion yen (approximately 2.8881 trillion won), up from the previous year. Sales are also anticipated to hit a record high of 1 trillion 900 billion yen (approximately 18.2875 trillion won), reflecting a remarkable 63% year-on-year increase.
Nintendo's optimism is largely fueled by the upcoming release of the Nintendo Switch 2, scheduled for launch on June 5, 2025. The company forecasts that sales of the new console will reach 15 million units in its first year, a figure that mirrors the initial success of the original Switch, which sold 15.05 million units in its first year after its launch in March 2017.
Shuntaro Furukawa, Nintendo's president, expressed confidence in the company's production capabilities, stating that they have sufficient capacity to increase game console production. A Japanese securities market official noted, "Nintendo has plenty of room for stock price increases," underscoring the potential for further growth.
However, the anticipated growth is not without its challenges. Furukawa also voiced concerns regarding U.S. tariff policies, which he indicated could have a significant negative impact on profits. He mentioned that these tariffs could result in "hundreds of billions of yen" in losses, highlighting that the Trump-era tariffs could pose an unexpected hurdle for Nintendo as it seeks to refresh its console lineup after eight years.
Despite these concerns, the company remains optimistic about the Switch 2's market entry. The planned software lineup to accompany the hardware includes 45 million units, with titles such as Mario Kart World, Donkey Kong Bananza, and Zelda Musou Early Stage set to launch alongside the console. However, some analysts have noted that the new console's launch titles may not be as strong as those available at the Switch's debut, which featured acclaimed games like The Legend of Zelda: Breath of the Wild and Splatoon 2.
In the fiscal year ending March 2025, Nintendo reported a 30% decrease in sales, totaling 1 trillion 649 billion yen, with net profit dropping by 43% to 278.8 billion yen. This decline was attributed to decreased sales of the original Switch console, which has faced stiff competition and market saturation.
The company has also announced a boost in its shareholder return policy, raising its annual dividend by 9 yen to 129 yen, reflecting its commitment to rewarding investors amidst fluctuating performance.
As Nintendo gears up for the launch of the Switch 2, the company is focusing on ensuring a smooth rollout and addressing concerns regarding semiconductor supply issues. Furukawa stated, "The production system is strengthening. We will work to deliver as quickly as possible after the release date," indicating that the company is actively working to mitigate potential supply chain disruptions.
The anticipation surrounding the Switch 2 is palpable, with many gamers eager to see how it will stack up against its predecessor. The original Switch was a groundbreaking console, known for its hybrid design that allowed for both handheld and docked play, and there are high expectations for the new model to build on that success.
In summary, while Nintendo faces potential challenges from external factors like U.S. tariffs, the company remains confident in its growth trajectory, buoyed by the anticipated success of the Switch 2. As the launch date approaches, all eyes will be on Nintendo to see if it can replicate the success of its previous consoles while navigating the complexities of the current market landscape.
