Nintendo shares rise on strong Switch sales outlook

Nintendo shares advanced on Wednesday after the company raised its annual Switch console sales forecast and outlined cost-reduction initiatives, lifting the stock to its highest level in two weeks.

The Kyoto-based gaming company now expects to sell 24 million Switch units in the fiscal year ending March 31, 2025, up from its prior guidance of 19 million units. The upward revision follows stronger-than-anticipated demand for the Switch 2, which launched globally in late April.

Analysts at Mizuho Securities noted that the revised forecast suggests "sustained momentum" in the Switch lifecycle, which has exceeded expectations since its 2017 debut. The company also announced plans to streamline operations, including workforce reductions and supply chain optimizations, to offset rising component costs.

The stock, which had lagged behind peers in recent months amid concerns over aging hardware, surged 3.2% to ¥9,850 ($68.50), marking its highest intraday level since mid-May. The gain extended a broader rally in Japanese equities, with the Nikkei 225 index up 0.8% on the session.

Investors also cited Nintendo’s robust first-quarter earnings, released last month, which beat consensus estimates as a key driver of the renewed optimism. The company reported a 15% year-over-year increase in operating profit, driven by software sales and licensing revenue.

While the Switch 2’s long-term success remains a topic of debate, the revised guidance and cost measures provided a near-term boost to sentiment. The company’s next major release, The Legend of Zelda: Echoes of the Past, is scheduled for launch in November, adding to the pipeline of anticipated titles.

Nintendo’s shares have gained 12% over the past month, outperforming the broader Japanese market, which is up 5% over the same period.