Nintendo just posted its fiscal third-quarter earnings, and the numbers tell a story of cautious optimism. The Japanese gaming giant maintained its full-year sales and profit guidance despite missing revenue expectations by roughly $300 million, betting that Switch 2 momentum will carry through the rest of the fiscal year. But investors aren't convinced - the stock's down more than 30% since its August peak, as concerns mount over rising memory costs and whether Nintendo's games pipeline can sustain the hype that drove record-breaking Switch 2 launch lines from Tokyo to Manhattan.
Nintendo is holding the line. The gaming giant just reported fiscal third-quarter earnings that fell short on revenue but beat on profit, all while keeping its full-year Switch 2 sales target firmly in place at 19 million units. It's a statement of confidence - or stubbornness - depending on how you read the market's reaction.
The numbers paint a mixed picture. Nintendo brought in 806.32 billion yen ($5.2 billion) in revenue for the quarter ending December 31, missing LSEG analyst estimates of 847.73 billion yen by nearly 5%. Net profit came in at 159.93 billion yen, actually beating expectations of 147.3 billion yen. That profit performance suggests the company's managing costs well, but the revenue miss is what has investors nervous.
The bigger question hanging over Kyoto isn't about last quarter's performance - it's about what comes next. Nintendo first raised its Switch 2 sales forecast to 19 million units back in November, up from an initial 15 million target. That was before the full weight of current headwinds became apparent. The company's sticking with that ambitious number even as its stock tells a different story.
Since the Switch 2's global launch in June, when fans lined up for hours in scenes reminiscent of classic iPhone launches, Nintendo's share price soared to record highs above 14,000 yen in August. Then reality set in. The stock has shed more than 30% of its value since that peak, now trading in a markedly different sentiment environment.
