Nintendo Switch Sales Dip As Chip Shortage Continues To Bite

According to Nintendo’s quarterly report, sales of the Switch console fell nearly 23% to 3.43 million units in the three months ended June 30th due to the global chip shortage.

In the third quarter, Nintendo Switch sales fell by 60% to 1.32 million units, while Switch Lite sales dropped by roughly 50% to 0.59 million. 1.52 million units of the Switch OLED, which went on sale only last October, helped to make up part of the loss.

To put things in perspective, software sales were down 8.6% to under 41.5 million units. Despite this, Sony still intends to sell 21 million systems in the year that ends in March of 2023.

According to the company’s results release, “Production was affected by factors such as the global shortage of semiconductor components, which resulted in lower hardware shipments and a fall in overall sales.” It predicted that chip procurement would “gradually improve” from the end of summer until the beginning of the fall.

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The quarter fell during a slower time of year for video game releases. With a total of 4.84 million units, Nintendo Switch Sports was the best-selling game on the platform, followed by Mario Strikers: Battle League and Kirby and the Forgotten Land.

In the most recent quarter, Mario Kart 8 Deluxe, a game published in April of 2013 and already five years old, sold 1.48 million copies. Nintendo has sold more than 111 million Switch devices worldwide, claiming that “demand remains stable” despite the machine’s age.

According to Bloomberg, Nintendo’s earnings fell short of analyst expectations due to these outcomes. A disappointing 101.7 billion yen (about $764 million) in operating profit was reported. At the same time, sales were somewhat higher than projected, at 307.5 billion yen (around $2.3 billion), compared to the average estimate of 332.1 billion yen (approximately $2.5 billion).

This quarter, Nintendo isn’t the only company to notice a drop in sales. A whopping 16 percent slashed Sony’s annual profit prediction after announcing a 26% drop in software sales. When contrasted to Nintendo’s five-and-half-year-old Switch, that’s coming from a firm that just debuted a new console.

According to a market research firm NPD report this week, US spending on video games in the second quarter of 2022 was down 13% from the same period in 2019.