Nintendo has announced a significant increase in its profits, largely attributed to a long-awaited reimbursement related to tariffs imposed during Donald Trump’s administration. The Japanese gaming company reported a remarkable 53.5% rise in profits, reaching ¥147.4 billion (£694 million) for the three-month period ending in June, far surpassing analysts’ projections of ¥77.8 billion.
The success of Nintendo’s Switch 2 console, launched last summer, played a key role in sustaining strong sales. In addition, popular titles like Yoshi and the Mysterious Book, Star Fox, and Pokémon Pokopia contributed positively. Nonetheless, the company experienced an overall decline in sales compared to the previous year, with revenues falling by 10% to ¥517.8 billion.
Nintendo credited the increase in profits to a refund received from the US tariffs following a ruling by the Supreme Court in February that deemed Trump’s extensive trade duties illegal. The Trump administration has reimbursed approximately $100 billion of the tariffs levied prior to the court’s decision, accounting for about 60% of the total $165 billion collected.
Following the earnings announcement, Nintendo’s shares listed in Tokyo rose by 2.87%. The company has initiated legal proceedings seeking a complete refund from the US government, which would include the amounts paid in tariffs along with applicable interest.
Although a refund seems to be forthcoming, Nintendo has not confirmed the specific amount it will receive, especially as it faces pressure to pass these savings on to consumers. Recently, the company was named in a class action lawsuit filed by customers, alleging that it raised prices due to tariffs but later profited from the refunds. Nintendo’s legal team has dismissed the lawsuit as lacking merit, asserting that the prices customers paid reflected the value of the goods they received.
In a related development, last month, Trump enacted new tariffs on over 80 countries, including Japan, which could create additional challenges for companies like Nintendo. However, a coalition of 25 US states has initiated legal action against the Trump administration concerning these tariffs, potentially paving the way for further refunds for struggling exporters.
