Nintendo has delivered stronger first-half profits despite a sharp slowdown in Switch 2 console sales, with blockbuster games and the latest Super Mario movie helping offset weaker hardware demand.

The Japanese gaming giant reported an 11% increase in net profit to ¥220.92 billion (approximately A$2.03 billion) for the six months ending September, although earnings fell short of analysts’ expectations of ¥224.6 billion.

Revenue declined 12% to ¥966.04 billion as sales of the Switch 2 cooled following its successful launch in June 2025.

Nintendo sold 6.5 million Switch 2 consoles during the period, compared with 10.4 million units a year earlier, raising questions about the company’s ability to sustain demand for its latest gaming hardware.

However, stronger software sales helped cushion the decline, with titles including Splatoon Raiders, released in July, contributing to improved performance.

Nintendo’s expanding entertainment business also emerged as a major growth driver, with income from intellectual property-related activities surging 88%.

The increase was supported by the box-office success of The Super Mario Galaxy Movie, which arrived in cinemas globally in April.

The result highlights Nintendo’s strategy of generating more revenue from its popular characters and franchises beyond traditional videogame sales.

The company has been expanding into films, theme parks, merchandise and licensing partnerships, with a live-action The Legend of Zelda movie scheduled for release in 2027.

Nintendo has also signed an agreement with US toy giant Hasbro to develop products based on characters from the Zelda franchise.

Despite the stronger profit result, investors remain cautious about Nintendo’s outlook.

The company’s shares have fallen 16% this year and are nearly 40% below their August 2025 peak, reflecting concerns about slowing console demand and rising manufacturing costs.

A global shortage of memory chips has added pressure to hardware production costs, while investors are also questioning whether consumers are spending more time using AI services at the expense of videogames.

Nintendo has already increased Switch 2 prices in several markets, including Japan and the United States, citing changing market conditions.

In Australia, the console now sells for approximately $769.95, compared with its original $699.95 launch price.

The latest results suggest Nintendo’s growing movie and licensing businesses are becoming increasingly important as the company faces the challenge of maintaining Switch 2 sales momentum.