Friday, August 12, 2022

Nintendo’s Switch sales are falling as it struggles with chip shortage

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Nintendo’s Switch sales dropped significantly in the past quarter, falling to 3.43 million units compared to 4.45 million in the same period last year, according to the revenue report. Software sales also fell to 41.4 million units, compared to 45.3 million year over year. All of that resulted in an operating profit of 101.6 billion yen ($763 million), down from last year and less than expected.

The company attributed the Switch’s sales problem to a shortage of parts, the same one Sony faced in the same quarter. “Hardware manufacturing was impacted by factors such as the global shortage of semiconductor components, which resulted in a decline in hardware shipments,” the company said. It noted that the OLED model made up a large share of Switch sales with 1.52 million units sold, and the lower margins on that model dragged profits down a bit.

Although game sales also fell, Nintendo managed to increase the overall percentage of first-party games sold. In fact, it was the second best first quarter for first-party game resale since the Switch’s launch – second only to Q1 2021, which was fueled by Animal Crossing: New Horizons. All things considered, however, Nintendo should call the quarter a success, as game buyers spent 13 percent less this year compared to 2021, according to Bloomberg.

Some of that was helped by the launch of three major games, the company stressed, most notably: Nintendo Switch Sports who arrived on April 29. Mario Strikers: Battles League launched on June 10, while Fire Emblem Warriors arrived on June 24. “More than 100 million users have played Nintendo Switch in the past 12 months,” the company added.

Nintendo hopes upcoming games will help next quarter. Xenoblade Chronicles 3 just launched, Mario Kart 8 Deluxe – Booster Course Pass: Wave 2 arrives on August 4, Splatoon 3 comes out on September 9th and you will see Kirby’s dream buffet sometime this summer. The company is also launching an OLED Switch Splatoon 3 Edition on August 26.

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