Nintendo's quarterly profit dropped unexpectedly due to a lack of new heavyweight games and rising Switch 2 component costs. The Kyoto-based company said that operating profit for the second fiscal quarter fell 16% to 73.9 billion yen, and sales fell 15% more than expected. Analysts had previously averaged forecasts that profit would be the same as the same period last year. Nintendo maintained its forecast of 3% profit growth for the full year. This performance seems to confirm investors' concerns that the Switch 2 has lacked momentum in its second year on the market. After the AI boom boosted component costs, Nintendo raised hardware prices, yet consumers are still picky when buying new games. Kazunori Ito, head of research at Morningstar Equities, said: “Growth slowed earlier than expected. Investors' enthusiasm for the Switch 2 has clearly cooled down.” In the six months to September, Nintendo sold 6.49 million Switch 2 consoles, a year-on-year decrease of 37%.

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