Nintendo’s latest financial results show that both Switch generations still have substantial momentum. Hardware sales are lower than a year ago, but software, film revenue and a United States tariff refund helped produce a powerful first quarter.
The company’s financial report for the first quarter of this fiscal year also highlights how unusual the year-on-year comparison is. Switch 2 launched during the first quarter of the previous fiscal year, creating a major launch-week sales spike in the earlier figures.
Switch 2 sales remain strong after launch
Hardware sales fell by between 31% and 34% for both consoles compared with the same period last year. That decline does not necessarily signal that either system is nearing the end of its life cycle, particularly when the previous year included Switch 2’s launch.
Nintendo sold 3.82 million Switch 2 systems during the quarter, taking lifetime sales to 23.68 million units. That total is enough to move the console ahead of GameCube sales. The original Switch also sold more than 660,000 units during the first three months of the fiscal year, despite launching nine years ago.
For readers comparing dedicated hardware generations, Nintendo’s figures offer a useful reminder that a console’s audience can remain active well beyond its launch window. Our arcade news and gaming coverage follows similar shifts across the wider games industry.
Game sales are moving in the opposite direction
While fewer consoles were sold than in the comparable period, Nintendo reported growth across both software libraries. Switch 2 exclusive games increased by 9.2%, while software for the original Switch rose by 38.6%.
Digital game sales climbed by 90% year on year, yet physical releases still represented 40% of Nintendo’s game sales. That balance makes it unlikely that Nintendo will immediately abandon game-card production in the same way Sony has announced plans to end disc production.
Physical media remains an important part of how players collect and access games. For anyone building a dedicated home setup, our arcade machine buying guide covers the broader decisions involved in choosing games hardware.
A US tariff refund lifted profits
Nintendo’s results received an additional boost from a $300 million refund connected with United States tariffs under the International Emergency Economic Powers Act. The refund followed a United States Supreme Court ruling and contributed to a 150% increase in profit as the cost of sales fell considerably.
Nintendo said customers did not pay the initial tariffs, which were primarily absorbed by the company rather than added to product prices.
The tariff refund is separate from the company’s underlying hardware and software performance, but it had a significant effect on the quarter’s reported profit.
Mario film drives wider Nintendo income
Nintendo’s income from intellectual property activities increased by 107.4%. This category includes official merchandise, royalties, apps, films and videos.
A major contributor was The Super Mario Galaxy Movie, released in April 2026 at the beginning of the fiscal year. Although it did not earn as much as The Super Mario Bros. Movie, it became the second-highest-grossing film based on a video game and generated more than $1 billion in revenue.
Nintendo’s family-focused approach is designed to reach existing fans while introducing its characters to people who may not already play its games. The company hopes its film projects can encourage new audiences to pick up a controller, extending the value of its intellectual property beyond consoles.
Zelda is the next major screen test
With a live-action The Legend of Zelda film in development, Nintendo is targeting an even broader audience. The company also hopes the movie can exceed The Super Mario Bros. Movie at the box office.
Alongside Nintendo’s latest results, the continuing strength of its software catalogue and film adaptations shows how closely its hardware, games and entertainment businesses now work together. Its broader product ecosystem can also include dedicated setups such as full-size arcade machines and compact bartop arcades.
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