Nintendo said on Friday that sales of its seven-year-old gaming console, the Switch, had slumped and its profits had fallen 55%.
The stock fell nearly 10% on Friday following the disappointing earnings report.
Japanese video game company Nintendo’s sales for the first quarter, which ends in June as part of the Bank of Japan’s fiscal year, fell short of analysts’ expectations at LSEG. The company reported sales of 246.6 billion yen ($1.68 billion), below expectations of $1.97 billion.
Nintendo reported net profit of $551 million, below the expected $482 million and down 55.3% from the previous year.
The company sold 2.1 million units of its trademarked Switch video game console, down 46% from the previous year.
Investors are hoping Nintendo will soon launch its next big device to replace the Switch, which was released in 2017. The Switch can be connected to a computer system at home or used as a standalone handheld device, and has brought renewed excitement to Nintendo after sales of its DS and Wii systems dwindled.
The Switch is Nintendo’s second-best-selling device, behind the Nintendo DS, which surged in popularity in the early 2000s.
Over the years, Nintendo fans have seen many different versions of the Switch with different display screens and features, but plummeting sales suggest it’s time for Nintendo to release its next business savior.
Serkan Toto, founder of games industry consultancy Kantan Games, told Reuters: Weak revenues “increase pressure on Nintendo over Switch 2 launch”
He said the next quarter is also likely to be a weak one for Nintendo.
The company had previously said it expected to launch the next model by March 2025 and sell 13.5 million Switch units in that time, a statement Nintendo reaffirmed on Friday. According to a CNBC report:.
Nintendo has garnered popularity not only for its trendsetting video game consoles, but also for releasing games featuring popular characters like Mario and Luigi. The company didn’t release any blockbuster video games in the first quarter, which couldn’t offset the Switch’s lackluster sales.
Nintendo’s software sales fell 41% from last year to 30.64 million units.
The company has been focusing on selling intellectual property to boost profits and is currently involved in the production of the animated “Super Mario Bros.” movie.
However, intellectual property division revenue fell 54% year over year to $100 million.
