Nintendo reports Switch sales dip as chip shortage continues to bite
Nintendo continues to struggle to meet its Switch production targets due to the global chip shortage, which contributed to a nearly 23 percent drop in console sales to 3.43 million in the three months ended June 30, the company reported today.
Sales of the standard Nintendo Switch fell 60 percent in the quarter to 1.32 million units, while sales of the Switch Lite fell nearly 50 percent to 0.59 million. The Switch OLED, which only went on sale last October, made up for some of the shortfall with 1.52 million units sold. Software sales also fell 8.6 percent to just under 41.5 million units. The company still expects to sell 21 million consoles during the year ending March 2023.
“Production was impacted by factors such as the global shortage of semiconductor components, which resulted in a decline in hardware shipments and a subsequent decline in overall sales,” Nintendo said in its earnings release. It said it expects chip purchases “to gradually improve from late summer to autumn”.
The quarter coincided with a quieter period for game releases. Nintendo Switch Sports was the bestseller with 4.84 million units, followed by Mario Strikers: Battle League and Kirby and the Forgotten Land with 1.91 and 1.88 million respectively. Mario Kart 8 Deluxe, a game released more than five years ago in April 2017, sold 1.48 million copies in the quarter. Nintendo is now sold over 111 million Switch consoles in total, saying that “demand remains stable worldwide” despite the age of the machine.
Bloomberg reports that these results have contributed to Nintendo’s revenues falling short of analyst estimates. Operating profit was 101.7 billion yen (about $764 million), less than the projected 115.2 billion yen ($865 million), while sales were 307.5 billion yen (about $2.3 billion), compared to average estimates of 332.1 billion yen (about $2.5 billion). ).
Nintendo isn’t alone in seeing sales falter this quarter. Sony reported last week that software sales are down 26 percent and has slashed its annual profit forecast by 16 percent. And that’s from a company that released a brand new console less than two years ago, compared to Nintendo’s five and a half year old Switch. Market research firm NPD reported this week that U.S. video game spending fell 13 percent year over year in the second quarter of 2022.