Nintendo Co. announced plans to unveil a successor to its aging Switch game console, following a bleak profit outlook for the current fiscal year.
President Shuntaro Furukawa confirmed on X that there will be an announcement regarding the next hardware platform by March. This announcement followed the company’s projection of a significant decline in operating income to ¥400 billion ($2.6 billion) for the fiscal year ending March 2025, with net sales expected to reach ¥1.35 trillion. These figures fell short of average analyst estimates, highlighting the challenges faced by the company as it navigates the market with aging hardware.
Earlier this year, Nintendo informed suppliers and software partners of the delay in launching the next-generation console until March 2025 or later, abandoning its initial plan to release it by the end of this year. This decision pits Nintendo against newer and more powerful consoles from competitors like Sony Group Corp. and Microsoft Corp. during the critical holiday season. Nintendo is also expected to withhold major releases of its popular franchises to drive initial sales of the next machine.
For the March quarter, Nintendo reported an operating profit of ¥64.5 billion, falling short of the average analyst estimate of ¥74.7 billion. While the company met expectations with 15.7 million Switch sales in the year ending March, it anticipates a significant drop in sales for the current period, forecasting 13.5 million units. Guidance on software sales also indicates a decline, from 200 million units to 165 million units.
Despite its success, the Switch’s aging hardware and family-friendly appeal, crafted by former Nintendo President Satoru Iwata, are showing signs of faltering. Nintendo’s history with the Wii U, which failed to replicate the success of the Wii, serves as a cautionary tale.
Nintendo is focusing on its Nintendo Switch Online subscription service to attract new customers and build a broad user base for the next console. Additionally, the company is exploring new revenue streams through its burgeoning motion picture business.
Following the triumph of The Super Mario Bros. Movie last year, Nintendo is working on a live-action film based on The Legend of Zelda, co-produced by game creator Shigeru Miyamoto and Marvel Studios founder Avi Arad, and distributed by Sony Pictures Entertainment Inc. The release date for the film is yet to be announced.
