Nintendo's H1 Operating Profit Jumps 49.1% as Software Outpaces Falling Hardware

Nintendo booked a 49.1% rise in operating profit to ¥216.5 billion ($1.3 billion) for the six months ended September 30, 2026, even as net sales slipped 12.1% to ¥966 billion ($6.1 billion). The profit surge rests on two pillars: steady software sales led by Splatoon Raiders, and a first-quarter US tariff refund. The tariff costs behind that refund, Nintendo noted, were "primarily borne by the company rather than passed on to consumers through product prices."

That's the short version. The longer story is a console business in transition, with software doing the heavy lifting.

What do the numbers say?

The half-year picture, per Nintendo's report:

• Net sales: ¥966 billion ($6.1 billion), down 12.1%
• Operating profit: ¥216.5 billion ($1.3 billion), up 49.1%
• Ordinary profit: ¥300.6 billion ($1.9 billion), up 27.4%
• Hardware sales (Switch and Switch 2): 7.76 million units
• Software sales (Switch and Switch 2): 90.22 million units

The dedicated video game platform segment declined 15.3% to ¥903.3 billion ($5.7 billion). Software units rose. Hardware revenue dragged.

How hard did hardware fall?

Switch 2 sales dropped 37.4% to 6.49 million units, against 10.36 million in the same period last year. That's a fall of nearly four million consoles in six months. Nintendo framed it gently, saying "many consumers continued to adopt the system, spurred on by factors like the release of new titles."

The original Switch fell harder in percentage terms: 32.7%, to 1.27 million units. The OLED model led with 63,000 units, followed by the OG Switch at 35,000 and the Lite at 29,000.

Which titles carried the half?

Splatoon Raiders, launched in July, sold 2.42 million units. Star Fox shifted 1.17 million in June. Fire Emblem: Fortune's Weave added 1.34 million in September. Switch 2 software sales rose 18.8% to 24.49 million units, up from 20.62 million.

On the original Switch, Tomodachi Life: Living the Dream was the standout at 8.81 million units. Rhythm Heaven Groove followed at 2.89 million. Original Switch software climbed 6.8% to 65.73 million units overall.

Digital accounted for 60.7% of total software sales, worth ¥249.6 billion ($1.5 billion), driven by growing demand for downloadable versions of packaged games. That mix shift matters: digital carries higher margins and steadier recurring revenue.

What does this change for Nintendo's roadmap?

Strategy is now explicitly two-track. "We aim to grow the Nintendo Switch 2 installed base by working to expand sales of existing titles and continuously introducing these new titles," Nintendo said, adding that third-party publishers also plan a range of releases. The company added it will "leverage the Nintendo Switch hardware installed base and rich software lineup to expand software sales and maintain engagement."

The next financial period brings Nintendo Switch Sports Resort, a remake of The Legend of Zelda: Ocarina of Time, and Metroid Ravenous in January 2027. Those releases, plus the pace of Switch 2 sell-through against a shrinking hardware base, will show whether the software-led profit model holds through the full year.