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Nintendo’s latest financial report is out, and the Switch 2’s sales continues to wow the industry.
Where Switch 2 Is So Far
The Switch 2 console has reached a global sell-through of over 6 million units in the past seven weeks. To understand this claim, we have to share Nintendo’s definition of sell-through here:
Sell-through refers to sales to individual consumers. In addition to units sold by retailers, this number also includes units sold to individual consumers through Nintendo’s direct-sales websites and as downloadable software.
Financial companies like Circana or Media Create make their own sales reports based on how many units retailers like GameStop and Yodobashi Camera. However, Nintendo also knows how many games and consoles they sell themselves. So they can add their numbers to what everyone else knows, to report the real sales numbers.
From that 6 million units sold, Nintendo was able to sell 5.82 million units to retailers. Nintendo refers to the numbers they sell to retailers as sell-in numbers. Of course, Nintendo will know this figure better than companies like Circana or Media Create too.
But There Are Some Caveats
But as high as these numbers are, Nintendo is still not meeting the demand for the Switch 2 around the world.
Nintendo actually said this to the public:
Currently, demand for Nintendo Switch 2 is exceeding supply in many countries, and we regret the inconvenience this is causing our consumers.
We will continue to strengthen our production and supply systems to deliver as much Nintendo Switch 2 hardware as possible.
However, there’s a little knife twist that comes with this great news for Nintendo.
Nintendo’s gross profit margin is down by 32.3 % year on year. This is because even though the Switch 2 costs more, it also costs considerably more to make than the original Switch. Nintendo has a profit margin on each Switch 2 sold, but it’s much lower than on the original Switch.
Software And Mario Kart World Sales
Nintendo also reported 8.67 million units of Switch 2 software sales. 5.67 million units from that number are actually for Mario Kart World. Nintendo admits that most of those Mario Kart World sales also come from the Switch 2 bundle.
Mario Kart World retails on its own for $ 80. However, if you bought a Mario Kart World Switch 2 bundle, you only had to pay $ 50 for it. Obviously Nintendo planned to entice gamers to get the console with the game.
Nintendo does not state that software sales outside of Mario Kart World are particularly high or low. There is no frame of reference to compare sales year-on-year. It probably does not account for revenue made by free-to-play games either.
What It All Means
We already know that Switch 2 is set to break sales records with its incredible launch success. And that huge unmet demand means that’s not changing soon.
But we also learned how successful Mario Kart World is in cold numbers. It’s also going to set new sales records for the Mario Kart franchise and for video games in general. While there is still a backlog of dev kits for more games, it also has a healthy number of games released and on the way. This is really only the start of the Switch 2’s journey.
