Monday, June 27, 2022

Nintendo predicts Switch sales will continue to slow this year

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Nintendo sold (PDF) A total of 23.06 million Switch units for the fiscal year ending March 2022, more than 5 million less than the previous year. The gaming giant originally thought it would sell 25.5 million units this fiscal year, but lowered its forecast to 24 million (then 23 million) as the ongoing global chip shortage made it difficult to source components. In fact, the company most likely expects to continue to grapple with supply chain issues as it lowered its forecast to 21 million Switch units sold for the next fiscal year ending March 2023.

Nintendo’s sales have been boosted in recent years by the pandemic, with people buying new game consoles to get them through the COVID lockdowns. In fact, the Switch became the company’s best-selling home console ever, after total third-quarter sales exceeded 103.54 million units. Nintendo noted in today’s financial release that it has now sold a total of 107.65 million consoles.

While global lockdowns aren’t as regular, parts continue to get harder and harder to come by, so the company’s forecast should reflect that reality as well. Analysts and business leaders had previously expected the chip shortage to persist into 2023, but Intel chief Pat Gelsinger recently said the problem could drag on into 2024.

Nintendo also expects lower net sales and net profit in the next fiscal year. In FY2022, it reported net sales of 1.695 billion yen (US$13 billion) and operating profit of 592 billion yen (US$4.6 billion). Next year, it expects its net sales to fall to about 1,600 billion yen (US$12.3 billion) and its annual operating profit to fall to $500 billion yen (US$3.8 billion).

Despite the lower hardware sales, Nintendo has claimed the highest annual software sales for a single family of hardware. It sold 39 million Switch games in fiscal 2022, led by Pokémon Brilliant Diamond and Shining Pearl with 14.65 million units sold. Pokemon Legends Arceuswhich sold 6.5 million copies in seven days, 12.64 million copies have been sold so far. Mario Kart 8 Deluxe sold 9.94 million units while Kirby and the Forgotten Land sold 2.1 million units in just over two weeks.

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