Nintendo Switch sales fall due to chip shortage

Japan's Nintendo Co Ltd (TYO:7974) said on Wednesday it sold 23% fewer Switch (NYSE:SWCH) consoles in the April-June quarter from a year earlier following a chip shortage.

The Kyoto-based gaming company said it expects supplies to improve "late summer into fall" and is maintaining its forecast to sell 21 million units a year by the end of 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 this quarter, down from 4.45 million a year earlier. Last year, it sold 23.06 million units. The hybrid home/portable Switch device, now in its sixth year on the market, is estimated to be experiencing its second annual sales decline. Last October, the company launched an upgraded Switch model with an OLED display to boost interest in the system. First-quarter software sales fell 8.6% to 41.4 million units, while operating profit fell 15% to 101.6 billion yen ($763 million), below analyst estimates. Nintendo took a 51.7 billion yen foreign exchange gain from the weaker yen. Investors are gauging the unraveling of the gaming boom among consumers stranded at home during pandemic lockdowns. Sony (NYSE:SONY) Group Corp last week reported a 15% drop in PlayStation user engagement compared to a year ago. "Gaming is bigger than ever and a certain portion of users are still playing, but the party is definitely over," said Serkan Toto, founder of gaming industry consultancy Kantan Games. Upcoming Nintendo games to support demand during the year-end shopping season include "Splatoon 3" in September and "Pokemon Scarlet and Violet" in November.