Nintendo Faces Dip in Quarterly Sales Amid Chip Shortages, Sold 3.43 Million Switch Units

Japan's Nintendo sold 23 percent fewer Switch consoles in the April-June quarter than a year earlier following chip shortages, it said on Wednesday.

The Kyoto-based gaming company said it expected procurement to improve "from late summer towards autumn" and maintained its forecast to sell 21 million units in the year through end-March 2023.

"Demand remains stable in all regions," Nintendo said in a presentation.

Nintendo, the company behind Super Mario sold 3.43 million units of its Switch console in the quarter, down from from 4.45 million a year earlier. It sold 23.06 million units last year.

It forecasts the second annual sales decline for its hybrid home/portable Switch device, which is in its sixth year on the market.

The company last October launched an upgraded Switch model with an OLED screen to drive interest in the system.

First-quarter software sales declined by 8.6 percent to 41.4 million units, while operating profit fell 15 percent to JPY 101.6 billion (roughly Rs. 6,020 crore), below analyst estimates.

Nintendo booked a JPY 51.7 billion (roughly Rs. 3,060 crore) foreign exchange gain from the weaker yen.

Investors are gauging the unwinding of a gaming boom among consumers who had been stuck at home during pandemic lockdowns.

Sony last week reported a 15 percent drop in PlayStation user engagement compared to a year earlier.

"Gaming is now bigger than ever, and a certain part of users stay on, but the party is certainly now over," said Serkan Toto, founder of game industry consultancy Kantan Games.

Upcoming Nintendo games to support demand into the year-end shopping season include Splatoon 3, which will be released in September, and Pokemon Scarlet and Violet in November.

© Thomson Reuters 2022