Nintendo Co., Ltd.

Business Details

The Nintendo group's core business is the development, manufacturing, and sale of hardware and software for handheld and home console video games, and it also operates IP-utilization businesses such as visual content, mobile apps, and theme parks. In FY2026 (ending March 2026), the launch of Nintendo Switch 2 marked a generational transition of the company's main platform. The overseas sales ratio is high at 76.9%, giving the business a structure that is highly susceptible to foreign exchange fluctuations. The group operates as a single segment, with resource allocation and performance evaluation conducted for the group as a whole.

Recent Overview

Net sales surged 98.6% year on year to ¥2,313,051 million, driven by the launch of Nintendo Switch 2

Nintendo Switch 2, launched in June 2025, showed a steady start, achieving full-year hardware unit sales of 19.86 million units. Major titles contributed, including 'Mario Kart World,' launched simultaneously with the hardware, which sold 14.70 million units, and 'Donkey Kong Bananza,' which sold 4.52 million units. Net sales reached ¥2,313,051 million (up 98.6% year on year), and operating income reached ¥360,117 million (up 27.5% year on year). However, the operating margin declined from 24.3% to 15.6% due to a rise in the cost-of-sales ratio. Ordinary income of ¥542,196 million and net income of ¥424,056 million were secured through the recording of ¥82,792 million in equity in earnings of affiliates and ¥32,664 million in gain on sale of investment securities. The company revised its dividend policy, introducing a new standard based on whichever is higher between 40% of consolidated operating income or a consolidated dividend payout ratio of 60%, and increased the annual dividend for the fiscal year under review to ¥219 (up from ¥120 in the previous fiscal year). For FY2027 (ending March 2027), the company forecasts net sales of ¥2,050,000 million (down 11.4% year on year) and operating income of ¥370,000 million (up 2.7% year on year).

Key Products

Growth Drivers

• Continued expansion of the Nintendo Switch 2 Platform's adoption and enhancement of its software lineup (for FY2027, ending March 2027: planned launch of new titles such as 'Yoshi and the Mysterious Book,' 'Star Fox,' and 'Splatoon Raiders')
• Continued utilization of the existing software library and stable sales of established titles owing to compatibility between Nintendo Switch 2 and Nintendo Switch
• Expansion of the digital business through increased sales of download software sold alongside packaged versions (digital sales in FY2026, ending March 2026, up 25.0% year on year)
• Continued creation of million-seller titles leveraging powerful IP such as Mario, Zelda, and Pokémon
• Enhancement of the added value of existing IP and stimulation of new demand through the rollout of Nintendo Switch 2 Edition software
• Utilization of diverse revenue sources, including equity in earnings of affiliates (¥82,792 million in FY2026, ending March 2026)

Risks

• Significant impact on business results depending on the presence and scale of hit products (risk of dependence on specific titles)
• Foreign exchange risk associated with an overseas sales ratio exceeding 76.9% (FY2027, ending March 2027 forecast assumptions: 1 USD = ¥150, 1 EUR = ¥175)
• Decline in operating margin due to a rise in the cost-of-sales ratio for Nintendo Switch 2 hardware and software (FY2026, ending March 2026: 15.6%, down 8.7 percentage points year on year)
• Risk of intensifying competition due to diversification of entertainment and an increase in competitors
• Risk of a slowdown in the pace of Nintendo Switch 2 adoption (net sales for FY2027, ending March 2027, are forecast to decline 11.4% year on year)
• Risk of recording extraordinary losses related to litigation, etc. (¥6,414 million recorded in FY2026, ending March 2026)
• Increase in cash outflow from financing activities and decline in the equity ratio due to share buybacks (¥99,927 million in FY2026, ending March 2026)