Tomodachi Life: Living the Dream drives Nintendo game sales higher while Switch 2 hardware sees a sharp decline

Background: The Report Period and Nintendo's Hardware Forecast

Nintendo's latest financial earnings report was published as a second-quarter fiscal update, covering the three-month period ending 30th September 2026. The company's hardware performance was discussed within the first half of the current fiscal year, a period for which Nintendo had already forecast a decline in hardware sales.

That forecast context shapes how the numbers should be read. Nintendo had not suggested that hardware demand would remain at early launch levels. Instead, the company still expected to sell 16.50 million Switch 2 units by the end of the current fiscal year. The half-year result therefore appears as a check against that target, not as a sudden reversal of expectations.

Development Process: Slower Hardware, Faster Software, and a Larger Overall Decline

For the first half of the current fiscal year, Nintendo sold 6.49 million Switch 2 units and 1.27 million units of the original Switch. Compared with the same period last year, that represented a 37.4 percent decline for Switch 2 and a 32.7 percent decline for Switch 1.

Software sales moved in the opposite direction. Switch 2 software sales rose 18.8 percent year-on-year, reaching 24.49 million units. Switch 1 software sales increased by a smaller 6.8 percent. The report attributed this growth to several popular first-party and third-party titles released during the first half of the fiscal year.

The most successful game was Tomodachi Life: Living the Dream, with 8.81 million units sold. Rhythm Heaven Groove followed at 2.89 million units. Splatoon Raiders, noted as the only Switch 2 exclusive among the three highlighted titles, sold 2.42 million units. Nintendo also highlighted digital game sales, which grew 60.5 percent year-on-year.

Those software gains, together with the continued weakness of the Yen, were not enough to prevent the overall business from declining 15.3 percent year-on-year. The result shows that the quarter's pressure was not confined to hardware units alone: stronger software volume did not fully offset the wider decline in reported business performance.

Latest Progress: Releases Still Ahead in the Fiscal Year

Nintendo's remaining releases for the current fiscal year include The Legend of Zelda: Ocarina of Time remake, Switch 2 re-releases of Pikmin 2 and Xenoblade Chronicles 3, and Metroid Ravenous.

The Legend of Zelda: Ocarina of Time remake was listed as launching on the day of the report, and it was awarded five stars in Eurogamer's review. Pikmin 2 and Xenoblade Chronicles 3 are positioned as Switch 2 re-releases, while Metroid Ravenous is set to arrive early in 2027.

Current Stage: Software Strength Is Carrying the Report, Not Hardware

At this point, Nintendo's earnings report shows a company with slower hardware sales but stronger software volume. Switch 2 hardware has not matched the prior-year pace, yet Switch 2 software reached 24.49 million units, led by Tomodachi Life: Living the Dream at 8.81 million units. The company's stated target remains 16.50 million Switch 2 units for the full fiscal year, and the remaining releases will determine whether the next part of the year changes the hardware trend or continues to rely on software performance.