A $300 million Nintendo tariff refund, recovered from costs previously embedded in its accounts, pushed the Kyoto-based games maker to a net profit of ¥147.4 billion ($931 million) for the quarter ending June 2026, a 54% rise from a year earlier that handily beat analyst expectations of ¥77.8 billion.
Revenue fell about 10% to ¥517.8 billion, yet still came in above forecasts. Nintendo said the refunded duties ‘were primarily borne by the company rather than passed on to consumers through product prices.’
Behind the headline, the operating picture was even sharper. Operating profit rose 150.5% year-on-year to ¥142.5 billion, up from ¥56.9 billion in the prior-year period, according to Yahoo Finance. Gross margin expanded by 22 percentage points to 54.3%, with gross profit reaching ¥281.3 billion, Quartr reported.
Shares of Nintendo closed 5% higher on Friday after the results were published. They remain 24% lower so far this year.
Software Hits and Digital Growth Drive the Rest
The tariff recovery was not the only engine. Tomodachi Life: Living the Dream sold 7.94 million units in the quarter, while Pokémon Pokopia moved 1.27 million units, according to CNBC. Both titles helped lift software margins.
Digital sales across Nintendo’s platforms totalled ¥132.7 billion, up approximately 90% year-on-year, driven by downloadable versions of packaged software. Its IP-related business, covering licensing, merchandise, and film, jumped 107.4% to ¥34.8 billion, attributed to strong audience engagement with The Super Mario Galaxy Movie, WCCFTech reported.
Switch 2 hardware sold 3.82 million units in the quarter, a decline from the prior-year period’s approximately 5.82 million units. Nintendo’s full-year forecast remains unchanged at net sales of ¥2.05 trillion and net profit of ¥310 billion, with Switch 2 hardware sales projected at 16.5 million units for the year through March 2027, according to Yahoo Finance.
How the Nintendo Tariff Refund Fits a Broader Earnings Trend
Nintendo is one of several large companies to book a material tariff windfall this earnings season. Amazon said it received about $600 million in refunds in the second quarter and plans to reimburse customers in limited cases where it can determine they directly bore the cost. Apple said refunds added about two percentage points to its June-quarter gross margin and 11 cents to diluted earnings per share. Siemens Healthineers saw its adjusted operating margin rise to 19.1% from 16.8% a year ago, with adjusted operating profit up 16% to 1.1 billion euros, partly on tariff-related gains.
The repayments stem from a 6–3 Supreme Court ruling on 20 February 2026, in Learning Resources, Inc. v. Trump, which held that the International Emergency Economic Powers Act does not authorise the president to impose tariffs, according to Snell & Wilmer. About $100 billion in refunds had been processed by early August, with a further $29 billion in accepted requests still awaiting action, according to SCOTUSblog, citing a filing in the US Court of International Trade.
Analysts at S&P Global cautioned last month that ‘most tariff proceeds will fail to sustain profitability as companies prioritize competitive prices and mitigating costs.’ The refunds are a one-time item; the underlying business must carry the weight from here.
The Class-Action Complication
Nintendo’s windfall has drawn legal scrutiny. The lawsuit Hoffert v. Nintendo of America Inc. (No. 2:26-cv-01360-RAJ, US District Court for the Western District of Washington) was filed in April by California resident Gregory Hoffert and Washington resident Prashant Sharan. They allege unjust enrichment and a violation of the Washington Consumer Protection Act, arguing Nintendo could recover its tariff costs twice: first through prices allegedly passed on to consumers, and again through government refunds. The putative class covers all US residents who bought Nintendo products from February 2025 to February 2026, according to Ars Technica.
Nintendo moved to dismiss on 20 July 2026. In its filing, the company argued: ‘The common thread among Plaintiffs’ claims is that it is somehow unfair that Nintendo has not retroactively adjusted its prices for completed sales in response to the outcome of the tariff litigation. But that is not how commercial transactions work.’
Nintendo has not said how it plans to use the refunds. The company did not immediately respond to a request for comment from Business Insider.
The outcome of the dismissal motion, expected before the end of the year, will be watched closely by other importers facing similar suits, and could determine how freely Nintendo, and companies like it, can book tariff windfalls without returning them to buyers.