Key facts
- Nintendo's profits surged 53.5% to ¥147.4bn in the three months to June.
- The profit increase significantly surpassed expert forecasts.
- A refund on tariffs imposed by Donald Trump was a key factor in the profit jump.
- The US Supreme Court previously ruled these tariffs illegal.
- Nintendo is facing a class action lawsuit from customers regarding tariff refunds.
Nintendo has reported a significant 53.5% increase in profits for the three months ending in June, reaching ¥147.4bn (£694m) and substantially surpassing expert expectations. This earnings boost was largely attributed to a refund on tariffs previously imposed by Donald Trump, following a US Supreme Court ruling that declared these levies illegal. The company's revenue, however, saw a 10% decline to ¥517.8bn, despite steady sales of its Switch 2 console and popular games.
The Trump administration has committed to refunding approximately $100bn of the $165bn collected from these tariffs before the court's decision. Nintendo had filed a lawsuit seeking a full refund with interest. While the refund appears to have been processed, the company has not confirmed the exact amount, amid ongoing pressure to pass these savings onto consumers.
Adding to the complexity, Nintendo is also defending itself against a class action lawsuit filed by customers who allege the company increased prices due to tariffs and then benefited from the refunds without passing them on. Nintendo's legal team has dismissed the lawsuit as "meritless." Meanwhile, Donald Trump recently enacted a new round of tariffs affecting over 80 countries, including Japan, which could present future challenges for companies like Nintendo. In response, a coalition of 25 US states has initiated legal action against the Trump administration over these new levies, potentially opening avenues for further refunds for exporters.