Nintendo Switch sales slump on chip shortage

© Reuters. Different models of the Nintendo Switch are seen on display in a GameStop in Manhattan, New York, U.S., December 7, 2021. REUTERS/Andrew Kelly

By Sam Nussey

TOKYO (Reuters) -Japan's Nintendo Co Ltd (TYO:7974) sold 23% fewer Switch (NYSE:SWCH) 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% to 41.4 million units, while operating profit fell 15% to 101.6 billion yen ($763 million), below analyst estimates.

Nintendo booked a 51.7 billion yen 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 (NYSE:SONY) Group Corp last week reported a 15% 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.

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