GAME OVER? Nintendo Profits Nosedive -71% Amidst Poor Consumer Demand...

As investors end the week looking to recover from tears, frustration, and many self-reflections on why they even mess with the markets, I’d like to also salute my fellow gamers today. 

(Source: Giphy) 

For those who haven’t heard, the tried and true Game Informer is closing up shop after thirty-three years of keeping nerd’s buried in their content instead of Playboys. It’s a travesty. However, with that said, while gamers are certainly mournful, gaming investor’s are no doubt having a rough time in the markets as Nintendo reported a staggering 71% drop in profits. 

(Source: Reuters) 

Why? Well, because Nintendo’s flagship product, the Switch, is now older than most TikTok influencers these days (kidding obvi) - but at a whopping seven years old, not only is the Switch practically collecting Social Security in gaming years, but consumers are pretty much over the console as the company sold a mere 2.1 million units of the Switch in its latest quarter, which is a jaw-dropping 46% decline year-over-year. 

(Source: Giphy) 

With that said though, the issue isn't that consumers are done with Nintendo all together, it’s the fact that they are holding onto their wallets in anticipation of the New Switch set to come out in Q1 2025. 

This buildup of anticipation had Nintendo clocking in revenue at only 246.6 billion Japanese yen (about $1.65 billion), which fell short of the expected 289.61 billion yen (about $1.94 billion). Net profit? A cool 80.9 billion yen (around $543 million), which sounds impressive until you realize it’s down 71% from last year.

(Source: Bloomberg) 

So to put it bluntly, Nintendo’s financial report reads like a bad breakup text: “It’s not you, it’s me… but mostly you.” This obviously has investors clamoring for news about the upcoming Switch 2, hoping it’ll be the console equivalent of the iPhone—something fresh, innovative, and capable of reinvigorating the company’s gaming business.

(Source: Giphy) 

But with all the negatives intact, Nintendo’s efforts to keep the aging Switch relevant shouldn’t go unnoticed. They’ve been revamping it with a better display and riding the wave of nostalgia with beloved titles like *Mario Kart 8* and *Mario Party*. But even still, the last quarter was pretty quiet in terms of new game releases. No blockbuster hits, no fanfare—just the sound of crickets chirping as software sales also dropped 41% to 30.64 million units. 

(Source: Nintendo Life) 

So in an effort to keep the business exciting for its customers and investors overseas, Nintendo has been dipping its toes into movies and theme parks to monetize its extensive IP. For example, Nintendo has taken extreme effort to get another Super Mario movie out by 2026 (Because clearly, what the world needs is more Chris Pratt pretending to be Italian). 

(Source: Giphy) 

But alas, the aim for Nintendo here is that these new features in the business will lure back more users to their video games. But again, licensing rights can only do so much; it’s the games that keep us coming back for more. Think Tesla making its money on government credits, not by selling cars. 

(Source: Yahoo News) 

Now what about the guidance, because you can’t have an earnings report without guidance. Well Nintendo has stuck to its forecast of selling 13.5 million units of the existing Switch model within this fiscal year. They’re banking on their loyal fanbase—those of us who still get hyped over the prospect of a new *Zelda* game or leverage more Mario coins than what’s in our 401(k)... 

(Source: Giphy) 

But still even with that, it’s clear Nintendo is walking a tightrope. While they’re trying to keep the current Switch afloat with revamps and new game releases, they’re also gearing up for the next-gen Switch. With the anticipation building and rumors swirling about backwards compatibility and 4K capabilities, it’s clear that many gamers are holding off on new purchases, waiting for the shiny new toy to drop (ahem, me).

(Source: Giphy) 

In the end, with Game Informer shutting its doors, and Nintendo teetering on the line of insolvency (possibly), this just adds to the drama within the gaming world. Plus, it’s just a good ole fashion “Did You Know” convo that will make you look even more well informed during the weekend cookout. So there ya go… you’re welcome! 

At the time of this writing Nintendo closed -9.77% on the day, (down -6.88% YTD). 

Stocks.News holds positions in Apple as mentioned in the article.