Nintendo profits fall 6.4% as hardware sales slow

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Nintendo profits fell to $6.6 billion in the last financial year, which the firm partly blames on semiconductor shortages.

Nintendo has just posted its financial results for the year to 31st March, and they reveal that the Japanese company’s profits have fallen to ¥885.4 billion ($6.6 billion), a decline of 6.4% on the year before.

A detailed look at the results reveals that net sales of hardware and software for Nintendo’s ‘dedicated game platform’ fell by 5.8%, while mobile-related income fell 4.3%. Sales of Switch hardware dropped from 23.06 million to 17.97 million, a reduction of 22.1%. Nintendo has accordingly revised its sales estimates downwards for the coming year, saying it aims to sell 15 million Switch consoles by March 2024. Nintendo blamed the slowing hardware sales partly on the worldwide shortage of semiconductors, which affected production in the first part of the year. However, the results note that the “production constraints caused by the shortage of semiconductors and other components were largely resolved in October”. The report also notes that the profit margins on the Switch OLED model are much lower.

One particularly interesting tidbit from the Q&A that accompanied the results was a question about why software sales were slowing in the US. Nintendo president Shuntaro Furukawa noted in response: “In the Americas, software unit sales for the nine months between April and December decreased by 19.5% year-on-year. When you look at region-by-region performance, the Americas was the only region where unit sales declined year-on-year.”

Read more: Following Zelda: Tears of the Kingdom leak, Nintendo goes after Switch emulators

He explains that Pokémon Scarlet/Violet and Splatoon 3 performed strongly in Asia, and titles like Nintendo Switch Sports and Mario Strikers: Battle League did well in Europe. Splatoon 3 has now sold 10.67 million copies, and Pokémon Scarlet/Violet has sold 22.1 million.

Furukawa said that Nintendo was now in “uncharted territory” as the Switch enters its seventh year on sale, and that “under these circumstances it is hard to imagine that hardware sales will continue to grow at the same pace they have to date”.

The slowdown in hardware sales will no doubt lead many to wonder whether Nintendo is planning a successor to the Switch in the near future. However, Furukawa would not be drawn on the question of the possibility of new hardware, instead saying that the company plans to maximise sales of software such as Zelda: Tears of the Kingdom.

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