A $300 million refund from the U.S. government landed on Nintendo’s books this quarter — and it helped push profit up 150%.
That figure leads the company’s financial report for the first quarter of the current fiscal year, and it’s the sort of entry that almost never surfaces during a gaming earnings call. After the United States Supreme Court ruled on IEEPA tariff refunds, the money came back, cost of sales fell sharply, and profits surged. Nintendo is careful to stress that customers never covered the original cost: “tariffs related to the refunds were primarily borne by the company rather than passed on to consumers through product prices.”
The Switch 2 just passed the GameCube
Year over year, hardware sales for both consoles fell somewhere between 31 and 34%. Set that aside for a moment, or at least put it in context. The Switch 2 arrived during the first quarter of the prior fiscal year, meaning last year’s figures are inflated by a launch-week surge. Lining the two quarters up side by side isn’t a fair comparison.
The number that counts: 3.82 million Switch 2 consoles shipped over the quarter, pushing lifetime sales to 23.68 million. The GameCube is now in the rear-view mirror.
Meanwhile the original Switch — a machine that debuted nine years ago — still cleared more than 660,000 units across three months. Nine years. By that stage, most hardware barely registers.
People are buying fewer boxes and way more games
Software sales for Switch 2 exclusives were up 9.2%. Respectable enough. The oddity is the original Switch, whose software sales grew 38.6% — a delightfully strange result for a platform most publishers would have quietly abandoned by now.
Digital sales jumped 90% compared with a year ago. That’s the statistic everyone will latch onto, particularly with Sony’s plan to wind down disc production still looming over the discussion.
The counterargument: 40% of Nintendo’s game sales are still physical copies. With numbers like that, the game card isn’t going anywhere.
The Galaxy movie made a billion dollars and didn’t beat its own predecessor
Income tied to Nintendo’s IP — official merchandise, royalties, apps, movies and videos — climbed 107.4%. One release accounts for the bulk of it.
The Super Mario Galaxy Movie opened in theaters in April 2026, at the very beginning of the fiscal year, and generated more than $1 billion in revenue. That makes it the second-highest grossing movie based on a video game.
Second, and only second, because it fell short of The Super Mario Bros. Movie. Nintendo outperformed everybody but itself.
Why Zelda is the real test
There’s no great mystery to the film strategy. Nintendo leans heavily on family-friendly content and values, and it wants its animated features to connect with longtime fans as well as with people who have never encountered this universe or its characters — and perhaps convince a few of them to pick up a controller for the first time.
A live-action The Legend of Zelda movie is in development, and Nintendo is hoping it draws an even bigger audience and finally tops The Super Mario Bros. Movie at the box office.
So the company’s own 2023 smash has become the bar it keeps coming up short against. A billion dollars, a Supreme Court refund, a nine-year-old console still moving units — and what Nintendo wants most is to outdo a cartoon plumber of its own making.