Game On: Nintendo reports sharp increase in H1 earnings, revenue

“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 Nintendo’s (NTDOY) action game “Hyrule Warriors: Age of Imprisonment,” a crossover between Nintendo’s “Legend of Zelda” franchise with Koei Tecmo’s (TKHCF) “Dynasty Warriors” series. The game release exclusively for the Switch 2 on November 6.

NINTENDO RESULTS: This week, Nintendo reported large year-over-year increases in H1 earnings per share and revenue, with EPS climbing to Y170.87 from Y93.33 and revenue jumping to Y1.1T from Y523.3B last year. “Regarding the Nintendo Switch 2 business during the first half of this fiscal year, the hardware has seen strong sales since its launch on June 5,” the company said. “Looking at software, Mario Kart World, which was released on the same day as the hardware launch, recorded sales of 9.57 million units, including bundle sales, and Donkey Kong Bananza, released in July, recorded sales of 3.49 million units, with both titles growing steadily. 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, also had stable sales. As a result, Nintendo Switch 2 hardware sales reached 10.36 million units, and Nintendo Switch 2 software sales reached 20.62 million units. In addition, Nintendo Switch hardware sales totaled 1.89 million units, and Nintendo Switch software sales totaled 61.56 million units. Turning to our digital business for our dedicated video game platforms, digital sales totaled 155.5 billion yen, down 2.8% year- on-year, due to factors such as the impact of foreign exchange rates and a decrease in sales of download-only software. In our IP related business, sales came to 33.3 billion yen, down 12.4% year-on-year, mainly due to a decrease in movie-related revenue.”

Looking ahead, the company raised its FY26 net sales vie to Y2.25T from Y1.9T and, of note, increased its FY26 Switch 2 hardware sales view to 19M units from 15M. “For Nintendo Switch 2, following the release of Pokemon Legends: Z-A – Nintendo Switch 2 Edition, as well as a Nintendo Switch 2 hardware bundle that includes this title in October, we plan to release Kirby Air Riders in November and Metroid Prime 4: Beyond – Nintendo Switch 2 Edition in December,” the game maker said. “Other software publishers also plan to release a range of titles. We will aim to keep the momentum of released titles and continuously introduce new titles to expand the platform’s user base. For Nintendo Switch, in addition to releasing new titles such as Super Mario Galaxy + Super Mario Galaxy 2 and Pokemon Legends: Z-A, we will strive to leverage the hardware installed base and rich software library to further expand sales of evergreen titles and maintain engagement. We have revised the financial forecast originally published on May 8, 2025, due to factors such as a revision of the full-year unit sales forecast considering sales trend through the first half of this fiscal year and prospects for the remainder of the fiscal year. In addition, we have changed our dividend policy, which will be applied from the year-end dividend for the fiscal year ending March 31, 2026.”

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EA RESULTS: Last week, Electronic Arts (EA) reported mixed Q2 results, with GAAP earnings per share beating consensus expectations but net bookings coming in below the Street. “Across our broad portfolio – from EA SPORTS to Battlefield, The Sims, and skate. – our teams continue to create high-quality experiences that connect and inspire players around the world,” said Andrew Wilson, CEO of Electronic Arts. “The creativity, passion, and innovation of our teams are at the heart of everything we do.” Amid the pending acquisition by an investor consortium comprised of The Public Investment Fund, private investment funds affiliated with Silver Lake Group, L.L.C. and private investment funds affiliated with Affinity Partners, the company did not provide guidance.

Meanwhile, Bloomberg (BAC), Citi (C), and Morgan Stanley (MS) are among roughly 20 lenders that have joined a $20B debt financing backing the private takeover of Electronic Arts, joining JPMorgan (JPM) in collecting fees tied to the biggest leveraged buyout in history. The group, which is also anticipated to include Barclays (BCS), was allocated between 1%-5% of the financing, less than the 10% that some had initially wanted, the report said, citing people with knowledge of the matter. Participants will collect a share of the roughly $500M of fees tied to the transaction.

ROBLOX RESULTS: Roblox (RBLX) also published its Q3 print last week, with EPS and revenue for the period beating consensus estimates and daily active users rising 70% year-over-year. “Our third-quarter results demonstrate the tremendous progress we’ve made toward our goal of capturing 10% of the global gaming market. Our platform and creator ecosystem are healthier than ever before, driven by broad-based strength, new viral hits, and our strategic investments in creator economics, platform performance, discovery, and the virtual economy. We are on track to expand age estimation to all Roblox users who access our communication features by early next year. We believe this initiative will establish a best in class standard for communication safety on social media and communications platforms,” said David Baszucki, founder and CEO of Roblox.

Looking ahead, the company provided upbeat bookings guidance for Q4 and FY25, adding that it plans to provide guidance for 2026 during its Q4 earnings call.

ROCKSTAR ACCUSED OF UNION BUSTING: Take-Two’s (TTWO) Rockstar Games, which develops the “Grand Theft Auto” and “Red Dead Redemption” franchises, fired dozens of workers in a move that British trade union claim was meant to prevent staff from unionizing, though the company claims they were let go for misconduct, Bloomberg’s Jason Schreier reported Friday. The developer terminated between 30 and 40 employees across multiple offices in the U.K. and Canada on Thursday, the author said, citing a spokesperson for the Independent Workers’ Union of Great Britain. All of the staffers were part of a private trade union chat group on Discord and were either members of the union or trying to organize at the “GTA” maker, the spokesperson told Bloomberg. “Rockstar has just carried out one of the most blatant and ruthless acts of union busting in the history of the games industry,” Alex Marshall, president of the IWGB, said in a statement. “This flagrant contempt for the law and for the lives of the workers who bring in their billions is an insult to their fans and the global industry.” Take-Two spokesperson Alan Lewis said the terminations were “for gross misconduct, and for no other reason,” the author noted.

MORE VIDEO GAME NEWS:

• EA’s “Battlefield 6” reclaimed the top spot in terms of unit sales in Europe for the week ending October 26, “Battlefield REDSEC”
• Nintendo announced that “Animal Crossing: New Horizons – Nintendo Switch 2 Edition” will arrive on Switch 2 on January 15, 2026
• In its quarterly report, Microsoft (MSFT) said that Q1 Xbox content and services revenue grew 1% year-over-year, though Xbox hardware sales fell 29%