Nintendo game sales surge thanks to Tomodachi Life: Living the Dream, but Switch 2 hardware suffers big decline
Nintendo’s Q2 FY27 earnings report reveals contrasting momentum: while software sales drove a 49.1% surge in operating profit to ¥216.5 billion ($1.3 billion), the Switch 2 experienced a steep 37.4% year-over-year sales decline in the first half of the fiscal year, with 6.49 million units sold. The original Switch also contracted 32.7% YoY. Overall net sales fell 12.1% due to reduced hardware revenue.
Despite the hardware slowdown, strong software performance from titles including Tomodachi Life: Living the Dream and Splatoon Raiders sustained profitability. The Switch 2 reached 26.35 million cumulative sales as of September 30, 2026—16 months post-launch—with over 73.21 million software units sold, indicating robust player engagement. A US tariff refund also supported operating margins, with Nintendo absorbing most tariff costs rather than passing them to consumers.
The data suggests the Switch 2’s initial launch momentum has normalized as the market matures, while strong exclusive software continues to drive engagement and platform confidence.