Game On: Nintendo raises prices on Switch 1 consoles
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NEW RELEASES: Among this week's new releases is Take-Two's (TTWO) action-adventure title 'Mafia: The Old Country,' out August 8 for PlayStation 5 (SONY), Xbox Series X/S (MSFT), and PC. Meanwhile, Electronic Arts' (EA) 'Apex Legends' is getting ported to Nintendo Switch 2 (NTDOY) on August 5.
NINTENDO: On Friday, Nintendo reported Q1 results, with earnings per share and revenue growing notably year-over-year as the quarter including the release of the Switch 2 console on June 5. 'The system has gotten off to a good start, with global sales exceeding 3.5M units in the first four days after launch, which is the highest-ever global sales level for any of our dedicated video game platforms,' the company said. 'In response to the strong demand that has surpassed our expectations, we are strengthening production to increase supply. Regarding Nintendo Switch 2 software, Mario Kart World, which was released on the same day as the hardware launch, recorded sales of 5.63M units, including units bundled with the hardware. Given that consumers can play both Nintendo Switch 2 exclusive software and Nintendo Switch software with Nintendo Switch 2, titles released for Nintendo Switch in previous fiscal years such as Mario Kart 8 Deluxe and Super Mario Party Jamboree, also sold well. As a result, Nintendo Switch 2 hardware sales reached 5.82M units, and Nintendo Switch 2 software sales reached 8.67M units. In addition, Nintendo Switch hardware sales totaled 0.98M units, and Nintendo Switch software sales totaled 24.40M units.'
Looking ahead, Nintendo guided for FY26 net sales of JPY1.9T, with operating profit expected to reach JPY320B and Switch 2 hardware sales anticipated to hit 15M units. 'There are no changes to the original financial forecast for this fiscal year, which was published on May 8, 2025,' the company added. 'For Nintendo Switch 2, we will aim to invigorate the platform and expand the user base by conveying the unique appeal of the hardware, including its improved performance and newly added features, and by continuing to introduce new titles that can leverage that appeal to the fullest. Regarding Nintendo Switch 2 software, following the release of Donkey Kong Bananza and Super Mario Party Jamboree -Nintendo Switch 2 Edition + Jamboree TV in July, we plan to release Drag x Drive and Kirby and the Forgotten Land – Nintendo Switch 2 Edition + Star-Crossed World in August. In October, we are planning to release Pokemon Legends: Z-A – Nintendo Switch 2 Edition, as well as a Nintendo Switch 2 hardware bundle that includes this title. There is also a wide variety of titles from other software publishers scheduled to be released. We will aim to maximize software sales by maintaining the momentum of Mario Kart World, which has gotten off to a strong start, and by continuously introducing these new titles.'
Following the report, Nintendo also announced pricing for the original Nintendo Switch family of systems and products will change in the United States based on market conditions, effective August 3, 2025. These include Nintendo Switch – OLED Model, Nintendo Switch, Nintendo Switch Lite and select Nintendo Switch accessories. Other Nintendo products, including certain Nintendo Switch 2 accessories, select amiibo, and the Nintendo Sound Clock: Alarmo, will also see adjustments. More specifically, the game maker raised the price of the standard first-generation Switch to $339.99 from $299.99, the Switch OLED to $399.99 from $349.99, and the Switch Lite to $229.99 from $199.99. The Fly notes that the move was announced just a day after U.S. President Donald Trump signed an executive order imposing new 'reciprocal tariffs' on a range of countries, including Cambodia and Vietnam, where Nintendo has shifted much of its hardware production.
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EA RESULTS: Last Tuesday, Electronic Arts reported Q1 earnings per share and net bookings that exceeded Wall Street estimates and reiterated FY26 guidance, though it provided a downbeat outlook for Q2. 'We delivered a strong start to FY26, outperforming expectations ahead of what will be the most exciting launch slate in EA's history,' said Andrew Wilson, CEO of Electronic Arts. 'From deepening player engagement in EA SPORTS to gearing up for Battlefield 6 and skate., we're scaling our global communities and continuing to shape the future of interactive entertainment.'
'We exceeded the high end of our guidance in Q1 highlighting the resilience of our live services and the breadth of our portfolio,' said Stuart Canfield, CFO of Electronic Arts. 'With strong fundamentals and a robust pipeline ahead, we remain confident in our full-year guidance and long-term margin framework.'
Following the report, BofA raised the firm's price target on Electronic Arts to $168 from $166 and maintained a Neutral rating on the shares. The firm said the Q2 guide being low was mostly because of differences in revenue phasing. The analyst also noted that the firm raised its price target due to a higher FY26 EPS forecast of $8.20, noting that it now models 7M 'Battlefield 6' units being sold in FY26, assuming a holiday launch.
Additionally, Baird increased its price target on Electronic Arts to $170 from $168 and reiterated an Outperform rating on the shares. The firm updated its model following Q1 results.
ROBLOX: Roblox (RBLX) reported Q2 results last week, with earnings per share coming in below expectations but revenue beating estimates. Average DAUs rose 41% year-over-year, while hours engaged jumped 58%. Meanwhile, the company provided upbeat net bookings guidance for Q3 and FY25.
Many analysts raised their price targets on the stock after the report, with Benchmark increasing its target to $150 from $77, believing the business has 'entered a new phase of breakout velocity,' with multiple monetization engines scaling in parallel. Additionally, Wedbush raised the firm's price target on Roblox to $165 from $142 and reiterated an Outperform rating on the shares. The firm views Roblox as the most compelling growth opportunity in the video game sector, given the flywheel from recent hit games; developer incentives, infrastructure improvements, and AI-driven discovery that are driving massive platform growth; genre expansion and aging up, which increase potential ad inventory; and pricing optimization across games and regions, driving improved revenue streams.
EPIC/ANDROID STORE: Last week, Alphabet's (GOOGL) Google unit post on X, formerly Twitter, 'Thanks to the verdict, the Epic Games Store for Android will be coming to the Google Play Store! It's already available worldwide from our web site, epicgames.com.' Investors in Epic Games include Tencent (TCEHY), KKR (KKR), Disney (DIS), and Sony.
MICROSOFT: Xbox maker Microsoft also reported quarterly results last week, with EPS and revenue for Q4 beating consensus estimates on strong cloud revenue growth. On the gaming side, the company said that Xbox content and services revenue, which includes Xbox Game Pass, rose 13% year-over-year in the quarter, though the software and technology conglomerate declined to provide new Game Pass subscriber numbers. Xbox hardware revenue, meanwhile, fell 22% in Q4.
'We are now the top publisher on both Xbox and PlayStation this quarter,' said CEO Satya Nadella on the company's earnings call. Nadella added that 'Game Pass annual revenue was nearly $5Bfor the first time,' noting that the company has 500M monthly active users across gaming platforms and devices. Looking ahead, Microsoft said on the call that it sees Q1 Gaming revenue down a mid-to-high single digit percentage.
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