Hardware and Software Sales are down, but the Switch overtakes PS4 in total sales

According to the latest financial report from Nintendo, the company has seen a decline in its profits and a lower outlook for future quarters. The reason for this dip in performance is due to a slowdown in sales for their Switch hybrid console. Over the nine months ending December 31st, Nintendo sold 14.9 million Switch units, which is a decrease from the 18.9 million units sold the previous year. To date, the Switch has sold over 122.5 million units and 994 million copies of software. Despite the lower sales during the previous 9 months, the Switch has now overtaken Sony’s PlayStation 4 in lifetime hardware sales to date, making it 3rd position overall.

Sales Slowing

As a result of the sales slowdown, Nintendo now predicts a 5.6% decline in revenue, reaching $12.06 billion by the end of the fiscal year on March 31st. This is a lower projection compared to their previous estimate of a 2.7% decline. The company also anticipates a 22.5% drop in net profit, reaching $2.8 billion, which was previously expected to decline by 16%.

The sales of Switch software also saw a decline, with 172.1 million copies sold in the nine-month period, compared to 179.3 million the previous year. Some of the top-selling titles include Pokemon Scarlet and Pokemon Violet, which sold 20.61 million copies, Splatoon 3 with 10.13 million copies, and Nintendo Switch Sports with 8.61 million copies.

Expectations Adjusted

However, Nintendo has reduced its expectation for Switch software sales to 205 million copies, down from its previous estimate of 210 million for the fiscal year. The company cited a shortage in semiconductor chips due to the pandemic and a shift in consumer behavior as some people start traveling again and engaging in activities outside of gaming as contributing factors to the sales slowdown. In addition, the global economic downturn may also be affecting demand.

As for their mobile and intellectual property business, the company reported stable royalty income, but a decline in income from smart-devices. Overall sales were down 2.3% year-on-year to $295 million.