Nintendo has reported a significant jump in profits, with the Japanese game maker’s earnings buoyed by a long-awaited refund on Donald Trump’s tariffs. The company said profits surged 53.5% to ¥147.4bn (£694m) over the three months to June, substantially beating expert forecasts for ¥77.8bn.
The strong profit growth was not driven by sales, which actually dropped by 10% to ¥517.8bn compared with the same period last year. Instead, Nintendo attributed the increase in profits to a refund on US tariffs. The Trump administration has refunded about $100bn from the tariffs charged before the US supreme court ruled that the levies were illegal.
Nintendo’s sales of its Switch 2 console, released last summer, maintained strong momentum, while popular games such as Yoshi and the Mysterious Book, Star Fox, and Pokémon Pokopia performed steadily. However, the company’s Tokyo-listed shares were up 2.87% on Thursday after the earnings release, despite the overall drop in sales.
The refund is a welcome boost for Nintendo, which had filed a lawsuit demanding a full refund from the White House. However, the company has stopped short of confirming the full amount of the refund, and it is unclear whether it will pass the savings on to consumers. A class action lawsuit filed last month claims that Nintendo hiked its prices due to tariffs but later benefited from the refunds.
The issue of tariffs is likely to continue to pose problems for Nintendo and other exporters. Last month, Trump imposed a fresh round of tariffs on more than 80 countries, including Japan. A coalition of 25 US states is now suing the Trump administration over the levies, potentially opening the door to another round of refunds.
