Core Insights - Nintendo's financial performance for the fiscal year 2025-26 shows significant growth, with total revenue reaching 1,099.5 billion yen, a 110% year-on-year increase, and operating profit of 145.1 billion yen, up 19.5% [2][3] Revenue Breakdown - The second quarter revenue was 527.2 billion yen, with operating profit at 88.25 billion yen. Japan and North America contributed over 60% of total sales, while other regions, including Asia-Pacific, accounted for 14.8% [2] Product Performance - The strong performance is attributed to the Switch console and its software, with global sales of the Switch 2 reaching 10.36 million units and the original Switch at 154 million units sold [3] - Total software sales for the Switch reached 1.45 billion copies, with the Switch 2 software sales at 20.62 million copies, including 9.57 million copies of "Mario Kart: World" and 3.49 million copies of "Donkey Kong: Tropical Freeze" [3] Sales Forecast Adjustments - Based on the strong performance, Nintendo raised its full-year operating profit forecast by 16% to 370 billion yen and increased the Switch 2 sales forecast to 19 million units and software sales to 48 million copies [3] - The initial sales target for the Switch 2 was set at 15 million units and 45 million software copies [3] Legacy Product Trends - Sales of the original Switch are stabilizing, with 910,000 units sold in the second quarter, while first-quarter sales dropped 53.5% year-on-year to 980,000 units. The annual hardware sales forecast for the original Switch was revised down from 4.5 million to 4 million units [4] - Despite the decline in hardware sales, software sales remain strong, with 37.16 million copies sold in a single quarter, indicating a robust user base and sustained purchasing power [4] Pricing Strategy - Nintendo announced price adjustments for the Switch series in the U.S. starting August 3, affecting various models and accessories, while maintaining current prices for the Switch 2 console and games [5]

Core Viewpoint - The Nintendo Switch 2 is being sold in mainland China through Hong Kong imports, despite not being officially released in the region, leading to higher prices compared to Hong Kong and Japan [1][2]. Group 1: Market Dynamics - Chinese e-commerce platforms like JD.com and Taobao are selling the Hong Kong version of the Switch 2, with prices generally above 4000 RMB, which is higher than the expected retail price of 6,9980 JPY (approximately 3462 RMB) in Japan [1]. - The Switch 2 is claimed to be "officially authorized first batch supply" by JD.com, indicating a potential gray market operation [1]. - Analysts suggest that there is still growth potential for gaming consoles in mainland China, despite a limited number of gaming enthusiasts [2]. Group 2: Regulatory Environment - The sale of gaming software in mainland China is subject to strict content review regulations, which may impact the availability of the Switch 2 and its games [2]. - The absence of a domestic version of the Switch for an extended period could lead to an increase in cheap piracy [2]. Group 3: Competitive Landscape - Tencent Holdings previously sold the first-generation Switch in mainland China and has heavily invested in mobile gaming, which remains the mainstream gaming format in the region [2]. - There has been no direct response from Tencent regarding their involvement in the sale of the Hong Kong version of the Switch 2 in mainland China [2].

Group 1 - Nintendo's upcoming Switch 2 console is experiencing unprecedented demand in the Japanese market, with a lottery pre-sale mechanism introduced to prioritize original Switch high-frequency players and online subscription service users [1] - The lottery pre-sale received 2.2 million applications, significantly exceeding expectations, leading to an apology from Nintendo's president for the large number of applicants who could not secure a purchase [1] - The Switch 2 is priced at $450 in the U.S. and 49,980 yen (approximately $350) in Japan, which is nearly 25% cheaper than the international version, effectively stimulating local demand [1] Group 2 - Nintendo's stock price surged by 5.5% in Tokyo, marking the largest intraday gain in two weeks [1] - Japan accounts for one-third of the global Switch install base, suggesting that global pre-orders could reach 6.6 million units [1] - Analysts predict that Nintendo could produce between 6 million to 8 million units of the new console before its official release on June 5 [1] Group 3 - Nintendo is taking various measures to enhance production capacity, impacted by trade policies that previously imposed a 46% tariff on one-third of the new units assembled in Vietnam, which has now been reduced to 10% for a 90-day grace period [2] - The company announced a price increase for Switch 2 accessories in the U.S. market and indicated potential future price adjustments for other products [2]