Nintendo has reported its earnings for the second quarter of 2025. The Japanese game maker said that net sales for the second quarter increased by 132.1% year-on-year to 572.3 billion yen ($3.8 billion), primarily due to the launch of the Nintendo Switch 2. The new console sold over 3.5 million units in its first four days, the highest ever for a Nintendo platform. It then surpassed 6 million units within seven weeks.
While the company saw this huge sales growth, its gross profit margin declined by 29.5 points to 32.3%. This was due to the higher proportion of hardware sales with the launch of the Switch 2. Its operating profit ratio also dropped significantly from 22.1% to 9.9%, a decline of 12.2 percentage points.
The reports also showed that advertising and research and development costs soared for the new console with advertising expenses more than doubling by 115.2% to 37 billion yen ($246 million), and research and development expenses growing by 12.2%. The company’s selling, general, and administrative (SG&A) expenses increased by 30.9% year-on-year, reaching 128.2 billion yen ($852 million). This group spending was directly linked to promotional activities for the Switch 2 launch.
The company also shared what’s next for its Switch ecosystem. It said that it has released new exclusive titles for the Switch 2 including Mario Kart World and Donkey Kong Bananza. For those not buying the Switch 2 yet, the original will continue to be supported with new titles like Pokémon Friends and Metroid Prime 4: Beyond, which are also playable on the Switch 2.
Nintendo also said that upgrade packs will be available for some titles, allowing players to enhance their games for the new console without buying a full new version, potentially bringing in more revenue for Nintendo. Finally, the company said it has been expanding its IP into other areas with a new official store and the opening of Super Nintendo World at Universal Epic Universe.