Nintendo Co forecasts a profit decline this year, the latest sign of waning momentum on the seven-year-old Switch game console.

The Kyoto-based company said it expects operating income to fall to ¥400 billion in the year to March 2025 on ¥1.35 trillion in net sales. Analysts polled by Bloomberg on average expect Nintendo to earn a profit of ¥478 billion.

For the March quarter, the company earned an operating profit of ¥64.5 billion, falling short of analyst expectations, which averaged out to a profit of ¥74.7 billion.

Nintendo has yet to announce the launch of a successor to the Switch and isn’t expected to release next-generation hardware this year, leaving it to contest the key holiday season against newer and more powerful consoles from Sony Group Corp and Microsoft Corp. The creator of the Super Mario Bros games is also likely to hold back major releases of its most popular franchises to help boost initial sales of the next machine.

Nintendo told suppliers and software partners that it was delaying the launch of the next-generation console until March 2025 or later, scrapping an initial plan to release it by this year’s end. The interim months ahead will test president Shuntaro Furukawa’s ability to communicate with investors and users. 

The Switch’s versatility and family-friendly ethos, developed under the oversight of creator and former Nintendo president Satoru Iwata, have helped it ratchet up cumulative sales of more than 140 million units. It is one of the company’s most successful pieces of hardware. But the firm’s history offers a cautionary tale: A decade earlier, the Wii U failed to carry on the success of the Wii, another of Nintendo’s biggest hits.

Nintendo has been pushing its Nintendo Switch Online subscription service to entice new customers to buy the 2017 gadget and cultivate a broad user base for the next console. The 134-year-old company is also turning to its nascent motion picture business for new revenue.

After the blockbuster success of The Super Mario Bros Movie last year, Nintendo is developing a live-action film based on The Legend of Zelda, to be co-produced by game creator Shigeru Miyamoto and Marvel Studios founder Avi Arad and distributed by Sony Pictures Entertainment Inc. The release date has yet to be announced.

  - Bloomberg