Nintendo Co.'s operating profit rose 49.1% to 216.5 billion yen in the six months to Sept. 30, the Kyoto-based company said on Thursday, as games and a U.S. tariff refund made up for a 37.4% slide in shipments of its Switch 2 console to 6.49 million units.

The split matters for Nintendo investors. A year ago the Switch 2 launch drove results through hardware volume. This year software made up a larger share of sales, which the company said lifted profit. Net sales fell 12.1% to 966.0 billion yen, yet net profit attributable to shareholders rose 11.0% to 220.9 billion yen.

Switch 2 hardware cools while software climbs

The Switch 2 has now shipped 26.35 million units since its mid-2025 debut, according to Nintendo's sales table. Second-quarter shipments were 2.67 million, Shacknews reported. Nintendo said many buyers kept adopting the system as new titles arrived, even though the first-half total trailed the launch period's 10.36 million.

Software moved the other way. Switch 2 games sold 24.49 million units, up 18.8% from a year earlier. Splatoon Raiders sold 2.42 million copies after its July release, Fire Emblem: Fortune's Weave sold 1.34 million and Star Fox sold 1.17 million. Mario Kart World, a launch-year title, added 1.78 million.

The original Switch still pulled weight. Its software sales rose 6.8% to 65.73 million units, led by Tomodachi Life: Living the Dream at 8.81 million copies. Hardware shipments of the original Switch fell 32.7% to 1.27 million, bringing its lifetime total to 157.20 million units.

Digital sales rose 60.5% to 249.6 billion yen, mainly from downloadable versions of packaged games. Income from Nintendo's intellectual property, such as films and licensing, jumped 87.9% to 62.7 billion yen, helped by The Super Mario Galaxy Movie. Sales outside Japan were 78.9% of the total.

The profit figure also carried a one-off. Nintendo booked about $300 million as a reduction in cost of sales during the first quarter, tied to refunds of tariffs imposed under the U.S. International Emergency Economic Powers Act (IEEPA). The company said it had mostly absorbed those tariffs itself rather than passing them on through prices.

Quarterly miss and an unchanged forecast

The quarter alone looked weaker. Net profit for July through September fell 29% to 73.5 billion yen, AFP reported, short of the 82.2 billion yen average estimate in a Bloomberg survey. Ordinary profit for the half included foreign exchange losses, although equity-method earnings of 60.8 billion yen and interest income of 26.7 billion yen lifted it 27.4% to 300.6 billion yen.

Nintendo left its full-year guidance, first issued on May 8, unchanged. It expects net sales of 2.05 trillion yen for the year to March 2027, down 11.4%, and operating profit of 370 billion yen, up 2.7%. Net profit is forecast to fall 26.9% to 310 billion yen. That outlook assumes 150 yen to the dollar, against 157.09 yen at the end of September, and already includes about 100 billion yen of extra costs from rising component prices, particularly memory, and U.S. tariffs.

Memory prices have been a recurring worry for chip buyers in Japan, as the recent swings in Kioxia and other memory stocks show. AFP noted that Nintendo raised the Switch 2's price this year because demand from artificial intelligence data centers has pushed up the cost of memory chips.

The guidance implies a heavy second half. Nintendo targets 16.5 million Switch 2 consoles for the year, which leaves about 10 million to ship between October and March. It also needs roughly 153.5 billion yen of operating profit in the period to reach its annual goal.

Holiday lineup and dividend

Nintendo is leaning on its holiday slate. It launched a Legend of Zelda 40th Anniversary Edition of the Switch 2 in October and released Nintendo Switch Sports Resort the same month. The Legend of Zelda: Ocarina of Time arrives in November, followed by Metroid Ravenous in January.

Shareholders will receive an interim dividend of 76 yen a share, up from 42 yen a year earlier, for a total payout of 87.6 billion yen. Under Nintendo's policy the interim payment equals 40% of first-half operating profit divided by shares outstanding, so the tariff refund flowed straight into it. The company kept its annual dividend forecast at 162 yen, which leaves 86 yen for the year-end payment, compared with 219 yen in total for the previous year.

The next test is the October-to-December quarter, which covers the year-end shopping season and the Zelda releases and will show whether the 10 million remaining consoles are within reach.