Game On: Nintendo says Switch 2 has sold 17.37M units since launch

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

NEW RELEASES: This week’s most notable new release is Square Enix’s (SQNXF) “Dragon Quest VII Reimagined,” a remake of 2000 role-playing game “Dragon Quest VII: Fragments of the Forgotten Past.” The title releases for PC, Nintendo Switch (NTDOY), Switch 2, PlayStation 5 (SONY), and Xbox Series X/S (MSFT) on February 5.

NINTENDO RESULTS: Nintendo released results for the first nine months of the fiscal year, with the company reporting 9M earnings per share of Y308.23 on revenue of Y1.91T, compared to Y203.73 and Y956.2B, respectively, over the same period last year. The game maker said the Switch 2 console got off to a good start following its launch on June 5 and unit sales continued to grow through the holiday season.

“Looking at Nintendo Switch 2 software, Mario Kart World, which was released on the same day as the hardware launch, recorded sales of 14.03M units, including bundle sales,” the company said. “Donkey Kong Bananza, released in July, sold 4.25M units, and Kirby Air Riders, released in November, sold 1.76M units. Pokemon Legends: Z-A – Nintendo Switch 2 Edition, released in October, also sold 3.89M units of the packaged version. Unit sales of the downloadable versions of this title and other Nintendo Switch 2 Edition titles are counted in the sales of Nintendo Switch software. Looking at Nintendo Switch software, Pokemon Legends: Z-A recorded sales of 8.41M units, including sales of the downloadable version of Pokemon Legends: Z-A – Nintendo Switch 2 Edition. Super Mario Galaxy 2, released in October, sold 2.42M units, and Super Mario Galaxy, also released in October, sold 2.28M units. Given that consumers can play both Nintendo Switch 2 exclusive software and Nintendo Switch software with Nintendo Switch 2, titles such as Mario Kart 8 Deluxe and Super Mario Party Jamboree, which were released for Nintendo Switch in previous fiscal years, have also shown stable sales. As a result, Nintendo Switch 2 hardware sales reached 17.37M units, and Nintendo Switch 2 software sales reached 37.93M units.”

Looking ahead, Nintendo reaffirmed its fiscal 2026 net sales guidance of Y2.25T and continues to see FY26 Switch 2 hardware sales view of 19M units. The company also reiterated its Switch 2 software sales gugidance of 48M units for FY26.

CAPCOM RESULTS: Japanese game maker Capcom (CCOEY) also reported nine-month results last week, with the “Street Fighter” maker’s 9M revenue rising 29.8% and operating profit rising 75.1% year-over-year. “In the Digital Contents business, the Company released Capcom Fighting Collection 2 for Nintendo Switch, PlayStation 4, Xbox One and PC and Onimusha 2 for PlayStation 4, Nintendo Switch, Xbox One and PC in May, revitalizing support from series fans,” the company said. “Additionally, the Company also released Street Fighter 6 and Kunitsu-Gami: Path of the Goddess for the Nintendo Switch 2 in June. Regarding catalog titles, cumulative global sales of Street Fighter 6 surpassed 6 million units following its rollout to new hardware as well as ongoing efforts to bolster coordination between the Company’s games and its esports activities in pursuit of wider brand recognition and an expanded user base. Moreover, user excitement rose for the Resident Evil series following the announcement that the latest title in series, Resident Evil Requiem, is scheduled for release in February 2026. This helped to drive sales growth for titles in the same series, led by Resident Evil 4 and Resident Evil Village. Additionally, sales of Devil May Cry 5 were strong due to carrying out pricing strategies coordinated with the television adaptation of the series and efforts to enhance brand value through building wider awareness of the Company’s IPs. Furthermore, unit sales of Monster Hunter Rise and Monster Hunter Rise: Sunbreak continued to increase alongside cumulative unit sales of Monster Hunter Wilds, the latest title in the Monster Hunter series (released February 2025), which surpassed 11 million units. As a result, unit sales of catalog titles reached 33.39 million units, exceeding the 28.61 million units recorded in the same period of the previous fiscal year.”

GOOGLE AI ULTRA: Last week, Alphabet’s (GOOGL) Google said that Google AI Ultra subscribers in the U.S. can now try out Project Genie, an experimental research prototype that lets users create and explore worlds. “In August, we previewed Genie 3, a general-purpose world model capable of generating diverse, interactive environments. Even in this early form, trusted testers were able to create an impressive range of fascinating worlds and experiences, and uncovered entirely new ways to use it. The next step is to broaden access through a dedicated, interactive prototype focused on immersive world creation. Starting today, we’re rolling out access to Project Genie for Google AI Ultra subscribers in the U.S (18+). This experimental research prototype lets users create, explore and remix their own interactive worlds… Project Genie is a prototype web app powered by Genie 3, Nano Banana Pro and Gemini, which allows users to experiment with the immersive experiences of our world model firsthand,” the company said.

Following the announcement, multiple companies in the game development space, including Unity (U), Take-Two (TTWO), AppLovin (AAP), and Roblox (RBLX), saw share pressure. Commenting on the matter, Wells Fargo noted that Unity has a relationship with Google’s DeepMind and better AI tools will lead to faster game development. Based on prior releases, it appears the Unity Engine was used as a training platform for the Genie model, the firm adds. With regard to Roblox and Take-Two, Wells continues to believe AI will lead to a higher velocity of game development, and sees it as a positive for the category.

Meanwhile, William Blair reiterated a Buy rating on Unity, noting the drop in shares following the Project Genie blog post. Fears seem centered on the perceived competitive threat to Unity’s Create business, which is currently being used by roughly 70% of all mobile games, the analyst tells investors in a research note. The firm believes the negative stock reaction is overdone, with fears overblown on something that is likely to further increase the reliance of Unity’s platform for runtime operations over time.

Freedom Capital also said the Unity selloff was overdone, while Evercore ISI said AppLovin’s downward move was “incorrect directionally.” Additionally, Jefferies analyst Brent Thill said the firm remains positive on Unity and AppLovin, saying a proliferation in AI content puts distribution at even more of a premium, requiring ads to stand out.

MORE VIDEO GAME NEWS:

• Ubisoft (UBSFY) unions have called for a “massive international strike,” Gamesindustry.biz reports
• Blizzard quality assurance workers have ratified a union contract with Microsoft
• In its Q2 report, Microsoft reported a 9% decrease in total gaming revenue, a 5% dip in content and services revenue, and a 32% year-over-year drop in gaming hardware revenue