Nintendo Bets IP Empire Will Drive Switch 2 Sales as Console Market Matures

Nintendo Bets IP Empire Will Drive Switch 2 Sales as Console Market Matures

Nintendo is deploying a coordinated push across movies, theme parks, and merchandise to boost sales of its Switch 2 console, banking that its decades-old characters can pull double duty—rekindling nostalgia in aging gamers while recruiting their children.

The strategy marks a significant expansion of how the Japanese gaming giant monetizes franchises like Super Mario and Pokémon, moving beyond the traditional console-and-cartridge model that made the original Switch its best-selling hardware of all time. For CFOs watching the gaming sector, it's a case study in leveraging IP across revenue streams when hardware refresh cycles alone may not guarantee blockbuster returns.

"These characters, like Mario and Pikachu, they're obviously Nintendo's main IP franchises, and because they are so recognizable, they have a massive appeal," Reuben Martens, a lecturer in film and media studies at Manchester Metropolitan University, told CNBC.

Nintendo President Shuntaro Furukawa outlined the company's thinking behind the IP expansion in November, describing it as a combination of three elements, though the full details were not disclosed in available reporting. The approach appears designed to create multiple touchpoints with consumers—watch the Mario movie, visit the theme park, then buy the console and games.

The timing is deliberate. Nintendo is attempting to replicate the runaway success of the original Switch with its successor device, the Switch 2, which launched earlier this year. The original Switch became Nintendo's best-selling console ever, a benchmark that creates both opportunity and pressure for the company's finance team as they project revenue from the new hardware generation.

The multi-platform strategy also addresses a structural challenge in the gaming business: consoles are cyclical, expensive to develop, and face increasing competition from mobile gaming and subscription services. By expanding IP into films and physical experiences, Nintendo is building revenue streams that don't depend solely on hardware sales cycles—a diversification play that resonates with the risk management priorities of corporate finance leaders.

What makes Nintendo's approach particularly noteworthy is the company's historical reluctance to license its characters broadly. For years, the company maintained tight control over Mario and other franchises, limiting their appearance outside Nintendo's own games. The current push represents a strategic reversal, one that appears calculated to maximize the commercial value of IP assets that have been carefully cultivated since the 1980s.

The question for investors and finance watchers is whether the strategy can deliver sustainable growth or simply represents a one-time boost from pent-up demand for Nintendo characters in new formats. The answer will likely emerge in the company's quarterly results over the next year, as the Switch 2 sales trajectory becomes clearer and the contribution from non-gaming IP revenue can be measured.

For now, Nintendo is making a bet that its characters are valuable enough to work across multiple businesses simultaneously—and that the synergies between watching a Mario movie and buying a Switch 2 are real, not just theoretical. It's a test of whether intellectual property, properly deployed, can function as a flywheel for hardware sales in an industry where the next console generation is never guaranteed to match the last.