Switch 2 sales are slowing down but apparently Nintendo is still winning

If you were following Switch 2 launch hype last year, Nintendo’s latest quarterly earnings report shows the numbers have dropped, with the hardware sales taking a pretty wild dive. They sold 3.82 million units this past quarter, which is down a hefty 34.4% in global sales compared to the pace it set during its launch window. Despite the drop, Nintendo isn't panicking just yet, and when you look at the full picture, it makes sense why.

First off, after selling 19.86 million consoles in its first year, things were always going to cool down a bit. Even with this drop, total Switch 2 sales are sitting at 23.68 million, which means it’s still pacing faster than the original Switch did at this point in its life. Furthermore, Nintendo is still expecting to ship 16.5 million consoles by next March. The tech giant noted in its earnings presentation, "Although Switch 2 sales volume declined... many consumers continued to adopt the system, encouraged by the release of new titles and other factors."

However, maintaining that target will be a test, given the upcoming pricing changes. As we previously reported back in May, Nintendo is following in the footsteps of Sony and Microsoft by introducing a mid-generation price hike. On September 1, 2026, the Switch 2's base price in the US will jump from $450 to $500 with similar €30 and CA$50 increases rolling out in Europe and Canada. While Japan already saw its hardware and Nintendo Switch Online subscription prices rise on July 1, the Western price hikes could further stifle consumer demand going into the holiday season.

Despite selling fewer consoles, Nintendo still managed to beat revenue expectations this quarter, largely driven by three distinct factors. First, strong game software sales offset the hardware decline, led by Tomodachi Life: Living the Dream, which sold nearly 8 million copies in just three months, along with steady contributions from Pokemon Pokopia, Mario Kart World, and Donkey Kong Bonanza.

Second, the company's transmedia push provided a huge boost, as The Super Mario Galaxy Movie officially crossed $1 billion globally since its April release, becoming the second highest-grossing video game movie of all time. Finally, Nintendo received roughly $300 million in Trump-era tariff refunds, helping cushion net income for the quarter.

However, dark clouds remain on the horizon. Nintendo says rising memory chip costs and tariffs are going to eat up about 100 billion yen ($633 million) in expenses this year. Charging $500 for a console right as component costs are climbing could make holiday shoppers hesitate a bit.