By Kosaku Narioka

Nintendo is guiding for higher annual profit even after posting a drop for the previous year, betting that solid demand for the long-awaited Switch 2 console will boost earnings when it goes on sale next month.

The Japanese videogame maker behind the "Super Mario" and "Pokemon" games said Thursday that net profit declined for the fiscal year ended March due to weaker sales of the now eight-year-old Switch and its software.

Nintendo plans to start sales of the successor to the Switch, one of the best-selling consoles of all time, on June 5.

The Switch was a runaway success for Nintendo following its launch in 2017. A pandemic-driven boom in gaming amplified the popularity of the hybrid console, which can be played on-the-go and at home, but sales of the aging device have declined in recent years.

Market expectations that Nintendo can score another hit with the Switch 2 helped lift the company's stock to a record high earlier this month. Shares have risen 30% so far this year.

The videogame maker has been diversifying its revenue streams with some success, offering different forms of entertainment by leveraging its popular characters and game titles.

Nintendo plans to produce new films based on the "Super Mario" and "The Legend of Zelda" game series, looking to build on previous box-office success.

The company said Thursday that net profit dropped 43% to 278.81 billion yen, equivalent to $1.94 billion, for the fiscal year ended March. That was slightly above the estimate of Y276.2 billion compiled in a poll of analysts by data provider Visible Alpha.

Nintendo's revenue dropped 30% to Y1.165 trillion. Revenue from mobile and intellectual property-related income fell 27% to Y67.6 billion due to a high base built on the blockbuster success of "The Super Mario Bros. Movie" the previous year.

For the year that began in April, Nintendo projects that net profit will rise 7.6% to Y300.00 billion and that revenue will climb 63% to Y1.900 trillion. It expects to sell 15.0 million Switch 2 consoles and 45.0 million software copies for the new device this fiscal year.

Nintendo said its earnings projections assume that U.S. tariff rates as of April 10 will remain in place throughout the fiscal year.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

May 08, 2025 04:48 ET (08:48 GMT)

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