Despite rather encouraging results, Nintendo is still struggling to produce enough Switches to meet demand. Nintendo’s hybrid console remains a victim of the industry’s long shortage of components.
Semiconductors are always absent. Although the great shortage of components seems to be slowly abating in recent weeks, the situation is still not ideal and Nintendo is paying the price. In its latest quarterly results released on August 3, the Japanese company acknowledged that Switch sales were being held back not by lack of demand, but rather by lack of supply.
I promise, there will be Switches at Christmas
“Hardware production has been impacted by factors such as the global shortage of components. This resulted in lower hardware shipments and lower overall sales figures”, says the company as an introduction to its quarterly results. Nintendo, despite its stature as a multinational video game company, is not spared by market fluctuations and is experiencing the same fate as Sony, which is also struggling to produce PlayStation 5s in sufficient quantity. All is not black, however, since the company expects the situation “gradually improves between late summer and early fall” and promise to use “appropriate means” to meet the demand for the holiday season.
As noted by journalist Oscar Lemaire, however, not all regions are in the same boat. In Japan, sales volumes of the Switch fell by 38% compared to the same period last year while, in Europe, we are witnessing a slight jump of 3%. The bulk of sales are made by the Switch Oled (1.5 million sales) and the “classic” Switch (1.3 million). The Lite model, meanwhile, represented only 17% of the total volume of consoles sold. In all, 3.4 million consoles were sold this quarter (-23% compared to 2021).
Mario Kart 8 is still a hit
Nintendo cannot count on its game sales to stem the fall since, on this side too, the results are in the red. 41.4 million titles found takers during the last quarter, a decrease of 8.6% compared to last year. It must be said that the period was rather quiet in release, with still good performances from the new Kirby game and Mario Strikers. It should also be noted that Mario Kart 8, which was still released more than five years ago, has also had great success, no doubt thanks to the recent arrival of new races.
However, the situation is far from critical for Nintendo. Firstly because occasional sales drops for a console that is more than five years old are not surprising (the Switch remains the fifth best-selling console in the world), but also because favorable exchange rates allowed Nintendo (which generates the bulk of its business outside Japan) to post a net profit of 875 million dollars. For a company that hasn’t launched new platforms in years, that’s quite comfortable. Faced with the difficulties encountered by Sony and Microsoft, Nintendo actually seems rather spared, even if the components are still sorely lacking.