Nintendo continued to struggle to meet its Switch production targets amid a global chip shortage, which led to a nearly 23% drop in console sales to 3.43 million units in the three months ended June 30. Company reports today.
Sales of the standard Nintendo Switch fell 60% to 1.32 million units during the quarter, while Switch Lite sales fell nearly 50% to 590,000 units. The Switch OLED, which only went on sale last October, made up some of the shortfall with 1.52 million units sold. Software sales also fell 8.6% to just under 41.5 million units. The company still expects to sell 21 million consoles in the year ending March 2023.
“Production was impacted by factors such as a global shortage of semiconductor components, resulting in a decline in hardware shipments and a subsequent decline in overall sales,” Nintendo said in its earnings report. The company said it expects chip purchases to “gradually improve from late summer to fall.”
The quarter coincided with a quieter period for game releases. Nintendo Switch Sports became its best-selling product with 4.84 million units, followed by Mario Striker: Battle League and Kirby and the Forgotten Land 1.91 and 1.88 million respectively. Mario Kart 8 DeluxeThe game was released five years ago in April 2017 and sold 1.48 million units this quarter.Nintendo is now on sale Over 111 million Switch consoles Overall, it said that despite the ageing of the machines, “demand remains stable” globally.
Bloomberg Report Those results caused Nintendo’s earnings to fall short of analysts’ expectations. Operating profit was JPY 101.7 billion ($764 million), missing expectations of JPY 115.2 billion ($865 million), while sales were JPY 307.5 billion ($2.3 billion), compared with the average estimate of JPY 332.1 billion Japanese yen (approximately $2.5 billion) ).
Nintendo wasn’t the only company seeing a dip in sales this quarter. Sony last week reported a 26% drop in its software sales and cut its annual profit forecast by 16%. That’s a company that released a brand new console less than two years ago, compared to Nintendo’s Switch five and a half years ago. Market research firm NPD reported this week that U.S. spending on video games fell 13% year over year in the second quarter of 2022.