Nintendo Q2 FY2027: Hardware Sales Drop, Software and Gross Profit Rise

Nintendo released its second-quarter earnings report for FY2027 on November 5, 2026, showing a sharp decline in hardware sales but growth in software and gross profit. According to Kotaku, Switch hardware sales fell 37.4 percent and Switch 2 hardware sales fell 32.7 percent.

Software sales moved in the opposite direction. Switch 2 software sales rose 18.8 percent versus 2025, and original Switch software sales rose 6.8 percent. Tomodachi Life: Living the Dream shipped 8.81 million units in the six-month period, while Rhythm Heaven Groove shipped 2.89 million units.

Sales in Nintendo's dedicated video game platform business declined 15.3 percent year-on-year. Operating profit fell 16 percent in the second fiscal quarter, a figure Nintendo had expected.

Gross profit rose 22.1 percent year-on-year in FY2027 Q1-Q2, helped by refunds of U.S. IEEPA tariffs previously recorded as cost of sales. IP related income increased 87.9 percent. Nintendo's share price was up 6.3 percent following the earnings report.

Context and Outlook

Nintendo states that continued weakness of the yen contributed to the 15.3 percent decline in its dedicated video game platform business sales. The Q1-Q2 2027 report does not include software sales of The Legend of Zelda: Ocarina of Time remake. Analysts cited by Bloomberg and Morningstar say investors have cooled on the Switch 2 platform, and analysts expect Grand Theft Auto VI's absence from Nintendo Switch platforms to dent profits over the Christmas period.