Nintendo Co., Ltd.
7974・Prime Market・Other Products
Business
Nintendo Co., Ltd., founded in 1947 and headquartered in Kyoto, is a home entertainment company. Its core business is the development, manufacturing, and sale of dedicated video game platform hardware and software, with operations conducted across a group comprising 32 subsidiaries and 4 affiliated companies. Its flagship products are Nintendo Switch 2 and Nintendo Switch along with their compatible software, and it is a global company boasting an overseas sales ratio of 76.9% (FY2026 (ending March 2026)), centered on North America, Europe, and Asia. In addition to its dedicated video game platform business, the company also engages in diversified businesses leveraging its IP, including visual content, mobile apps, character merchandise, and location-based entertainment, drawing on powerful IP such as Mario, Zelda, and Pokémon to maintain a broad customer base spanning a wide range of ages and generations.
Business Model
The core of profitability is a platform business that continuously creates demand for compatible software by popularizing dedicated video game platforms (hardware) in the market. Software has a higher profit margin than hardware, and the sales ratio between hardware and software determines profitability. The expansion of digital download sales (digital sales in FY2026 (ending March 2026) increased 25.0% year on year) is expanding high-margin digital revenue. In addition, the company has a multi-layered revenue structure that thickens non-operating income through equity-method investment profit from Pokémon Co. and others (¥82,792 million in FY2026 (ending March 2026)) and IP-related income, etc. (¥73,510 million).
Company Strengths
The company holds powerful IP including Mario, Zelda, Pokémon, and Donkey Kong, and has repeatedly delivered million-selling titles even in the first year of the new hardware's launch, such as Mario Kart World (14.70 million units) and Donkey Kong Bananza (4.52 million units). Cumulative sales of Nintendo Switch software reached 136.91 million units in FY2026 (ending March 2026) alone, demonstrating the sustained commercialization power of its IP.
As of the end of FY2026 (ending March 2026), the current ratio stood at 396%, with cash and cash equivalents of ¥1,316.6 billion (converted at ¥131,660 million), 1.5 times the total liabilities. All capital expenditures and R&D costs are funded internally, maintaining a financial structure that does not rely on external borrowing. Net assets reached approximately ¥2,955.1 billion, giving the company high resilience against changes in the business environment.
The company has built a global structure comprising more than 15 domestic and overseas development subsidiaries (including Retro Studios and Next Level Games) and 9 sales subsidiaries. Following its launch in June 2025, Nintendo Switch 2 sold 19.86 million units in its first full year, achieving steady market penetration. Its design, which allows continued use of the existing software library through compatibility with Nintendo Switch, supports simultaneous demand for both the new and previous platforms.
ENVALITH's Perspective
Performance Trend
Net sales peaked at ¥1,695,344 million in FY2022 (ended March 2022) but declined for three consecutive fiscal years to ¥1,164,922 million in FY2025 (ended March 2025). In FY2026 (ending March 2026), net sales rebounded sharply to ¥2,313,051 million, up 98.6% year on year, driven by the launch of Nintendo Switch 2 (June 2025). Meanwhile, operating income increased only 27.5% year on year to ¥360,117 million, as the cost of sales ratio rose sharply from 39.0% in the prior period to 60.7%, pushing the operating margin down to 15.6%, the lowest level in the past five fiscal years. The cost structure characteristic of the hardware launch phase is weighing on profitability. Ordinary income rose sharply to ¥542,196 million, up 45.6% year on year, reflecting the recognition of equity in earnings of affiliates of ¥82,792 million and foreign exchange gains of ¥44,339 million. Profit attributable to owners of parent reached ¥424,056 million, up 52.1% year on year, also supported by an extraordinary gain of ¥32,664 million from the sale of investment securities.
Growth Strategy
Sustained growth through expansion of the Nintendo Switch 2 install base and enrichment of the software lineup
Nintendo Switch 2, launched in June 2025, achieved first-year sales of 19.86 million units. Toward FY2027 (ending March 2027), the company will continue to release new titles such as "Yoshi and the Mysterious Book" (May), "Star Fox" (June), and "Splatoon Raiders" (July) to sustain hardware momentum.
Nintendo Switch 2 is compatible with Nintendo Switch software, and Nintendo Switch software sales reached 136.91 million units in FY2026 (ended March 2026). Through the rollout of Nintendo Switch 2 Edition software, the company will enhance the added value of existing IP and maintain continued operation of the previous-generation platform.
Digital sales in FY2026 (ended March 2026) increased 25.0% year on year, driven by increased sales of download software sold alongside packaged versions, among other factors. As a higher digital sales ratio contributes to lower cost ratios and improved profit margins, the company aims to continue this expansion.
Starting from FY2026 (ended March 2026), the company adopted a new dividend policy based on whichever is higher between 40% of consolidated operating profit or a 60% consolidated dividend payout ratio. In FY2026 (ended March 2026), dividends of ¥252,949 million and share buybacks of ¥99,927 million were executed. The annual dividend forecast for FY2027 (ending March 2027) is ¥162 per share (payout ratio of 60.2%).
Last updated: July 19, 2026