Strong Holiday Sales Drive Nintendo Q4 Profits Beat — Dispelling Switch 2 Sales Cooling Fears

 

On Tuesday local time (February 3), Japanese video game giant Nintendo released its fiscal Q3 results (ended December 31, 2025, calendar Q4).

 

The report showed Q3 revenue of 806.32 billion yen (~$5.2 billion), below the expected 847.73 billion yen but up 86% YoY; net profit of 159.93 billion yen, above the expected 147.3 billion yen and up 24% YoY.

 

Nintendo reaffirmed its November guidance: Switch 2 sales of 19 million units for the fiscal year ending March 2026. Cumulative sales now stand at 17.37 million units, with 7 million sold in Q3 alone.

 

The Switch 2, Nintendo's next-gen console launched last June, continues the hybrid home/portable design of its predecessor. Upgrades include a larger screen and improved graphics performance.

 

Nintendo stated that the Switch 2 is the fastest-selling console in its history.

 

On the software side, Mario Kart: World (launched alongside Switch 2) has sold approximately 14 million copies. Globally, about 129 million people are actively playing on the Switch platform.

 

Nintendo's stock has faced pressure in recent months. After peaking above 14,000 yen in August following the launch, shares have fallen more than 30%.

 

Ahead of the key December holiday sales season, markets worried about Switch 2 sales momentum cooling.

 

Market research firm Circana noted last month that the Switch 2 was the top-selling console in the U.S. for December.

 

Kantan Games CEO Serkan Toto said: “The ‘sales collapse’ predicted by some investors did not materialize in the holiday quarter.”

 

Jefferies analyst Atul Goyal added that concerns over Switch 2 sales slowdown have been overblown, with strong Q4 performance in the critical sales season.

 

Investors are now watching potential headwinds: whether unprecedented memory price surges will hit costs, and if Nintendo has a strong enough game lineup to sustain Switch 2 long-term.

 

Goyal wrote in a recent note: “We view memory cost concerns as more speculative and strategically manageable.”

 

On the game front, the Super Mario Bros. series marked its 40th anniversary last year, with more titles planned, alongside a new Splatoon game.

 

Third-party developers are also creating for Switch 2, including major IPs like Resident Evil and Final Fantasy.