Nintendo has reported a significant financial upswing for the first quarter of its fiscal year, driven by a combination of robust software sales, intellectual property-related income, and a considerable U.S. tariff refund.
The company's financial report indicates that while hardware sales for both the original Switch and the Switch 2 saw a year-on-year decrease of 31-34%, the consoles continue to perform well. The Switch 2 sold 3.82 million units this quarter, bringing its total sales to 23.68 million units and surpassing the GameCube's lifetime sales. The original Switch, released nine years ago, still managed to sell over 660,000 units in the same period.
Software sales showed notable growth, with Switch 2 exclusive titles increasing by 9.2% and original Switch software sales rising by a remarkable 38.6%. Although digital game sales surged by 90%, physical copies still constitute 40% of Nintendo's game sales, making a shift away from game card production unlikely.
A substantial $300 million refund from the United States, stemming from a Supreme Court ruling on IEEPA tariff refunds, contributed significantly to Nintendo's profitability. The company stated that these tariffs were primarily borne by Nintendo rather than passed on to consumers. This refund, coupled with reduced cost of sales, led to a 150% increase in profits for the quarter.
Nintendo's intellectual property-related income, which includes merchandise, royalties, apps, and media, also experienced a significant rise of 107.4%. This growth was largely attributed to the success of "The Super Mario Galaxy Movie," released in April 2026. The film garnered over $1 billion in revenue, becoming the second-highest-grossing video game adaptation despite not matching the box-office performance of "The Super Mario Bros. Movie."
The company aims for its animated films to attract both existing fans and new audiences, potentially encouraging them to engage with Nintendo's video game offerings. With a live-action Legend of Zelda movie also in development, Nintendo hopes to expand its reach and exceed the box-office success of its previous Mario film.