A couple interesting bits in the Q3 earnings Q&A:
When asked why Switch 2 sold better in Japan, Furukawa didn’t mention the local hardware price but credited Pokémon Legends: Z-A and Kirby Air Riders. It seems that those games are system sellers in Japan, but less so overseas.
![[Screenshot of Q3 FAQ A3]
Furukawa:
Hardware-related procurement purchases are primarily made in U.S. dollars, so given the current exchange rate environment, the better-than-projected hardware sales in Japan will have a downward effect on gross profit and operating profit.
The backdrop to hardware sales in Japan trending better than our expectations was the release of Pokémon Legends: Z-A - Nintendo Switch 2 Edition and Kirby Air Riders during the holiday season building on the initial momentum of Nintendo Switch 2 hardware. We believe that users in Japan saw these titles as an opportunity to transition to Nintendo Switch 2 at a relatively higher rate compared to Nintendo Switch owners outside of Japan.](https://ninpatentswatch.com/wp-content/uploads/2026/02/qa-fy26q3-3.png)
When asked why the financial forecast isn’t revised despite a weaker yen, Furukawa partly attributed that to the proportion of 3rd party software sales being higher than previously forecasted. Remember when Chris Dring suggested that 3rd party sales were “below [the] lowest estimates”?
![[Screenshot of Q3 FAQ A2, part 1 of 2]
Furukawa:
We revised the assumed exchange rates to better align them with the current situation, as there was an increased discrepancy between the rates announced in our second quarter earnings report and our latest outlook. Revising the exchange-rate assumptions to reflect a weaker yen is expected to have some upward effect on net sales and each profit level, but after taking other adjustments into account, the changes did not reach a level that would require a revision to our earnings forecast.
Our global hardware and software sales volume forecasts remain unchanged. However, breakdowns by region and by product are based on different assumptions than the revised forecasts announced at the time of the second quarter earnings report. Specifically, we expect](https://ninpatentswatch.com/wp-content/uploads/2026/02/qa-fy26q3-2-1.png)
![[Screenshot of Q3 FAQ A2, part 2 of 2]
that the positive impact of the weaker yen on our financials will be offset by the greater proportion of Nintendo Switch 2 hardware sales being accounted for by sales in Japan, as well as the greater proportion of software accounted for by titles of other software publishers. As for the volume of hardware sales, you are correct that sales in Japan exceeded our expectations while overseas sales were somewhat weaker than expected.](https://ninpatentswatch.com/wp-content/uploads/2026/02/qa-fy26q3-2-2.png)
P.S.: I suspected from the start that the infamous quote came from Unity’s Survival Kids team (who built a game that no one expected, and likely had unrealistic sales estimates) to shift the blame to the platform, and Dring relayed it uncritically.
[Originally posted on 2026-02-04 Pacific Time]
