Nintendo's profits jumped 53.5% despite a revenue decline, thanks to a surprise one-time US tariff refund

Nintendo's first-quarter results for fiscal year 2027 showed a jump in profits. While revenue fell 9.5% to 517.8 billion yen, net profit jumped 53.5% to 147.4 billion yen, substantially beating analyst estimates of 74.4 billion yen.

Nintendo said sales of its Switch 2 console, released last summer, "maintained strong sales momentum," while games such as Yoshi and the Mysterious Book, Star Fox, and Pokémon Pokopia "performed steadily." However, that was not enough to offset an overall decline in sales compared with the same period last year.

Instead, profits were boosted by a one-time U.S. tariff refund that Nintendo had previously recorded as a cost of sales, providing a significant lift to the company's bottom line. The refund followed a U.S. Supreme Court ruling in February that declared Trump's Liberation Day tariffs illegal, after which Nintendo filed a lawsuit seeking a full reimbursement.

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The company has not confirmed the exact amount it received back, and is facing a class action lawsuit from customers who argue Nintendo raised its prices because of tariffs and then quietly benefited from the refunds. Software also made up a larger share of total sales this quarter compared to last year.

Switch 2 sold 3.82 million units during the quarter, bringing the lifetime total to 23.68 million since its June 2025 launch. Switch 2 software sales reached 9.46 million units, led by Yoshi and the Mysterious Book and Pokémon Pokopia. The original Switch is still moving too, with Tomodachi Life: Living the Dream alone selling 7.94 million units since its April release.

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The Super Mario Galaxy Movie has now crossed $1 billion at the global box office since its April release, pushing Nintendo's IP-related income up 107.4% to 34.8 billion yen for the quarter. Digital sales also surged 90% year-over-year to 132.7 billion yen.

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How many Switch 2 consoles has Nintendo sold this fiscal year and what's the current lifetime total?

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Which Switch 2 games led software sales this quarter and how many software units did Switch 2 sell?

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Question #3

How did the U.S. tariff refund affect Nintendo's reported net profit and did the company disclose the refund amount?

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What portion of Nintendo's quarterly sales increase came from IP-related income after the Super Mario Galaxy movie crossed $1 billion?

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Nintendo maintained its full-year forecast of 16.5 million Switch 2 units and 60 million software units, with major titles still to come, including The Legend of Zelda: Ocarina of Time. A live-action Zelda film is also on track for 2027.