Nintendo Reduces Forecasts While Claiming Switch Chip Shortages Are “Largely Resolved”

Nintendo stated that supply issues that have limited production for several years were “largely resolved” in the final months of 2022 as part of its nine-month financial report for the 2022–23 fiscal year.

The company claims that the global semiconductor shortage and supply chain issues that have long plagued manufacturers of consumer electronics had little impact on its output between October and December of last year when discussing Nintendo Switch sales in its explanatory materials.

For the months of October through December 2022 which encompass the holiday season, the effects of shortages of semiconductors and other components was largely resolved, and shipments generally went according to plan. However, unit sales were down compared to the same period last year, when Nintendo Switch – OLED Model was released.

The supply shortage may have had less of an effect on Nintendo than its rivals in the video game industry because the Switch uses more advanced technology than Microsoft and Sony’s more potent systems. In comparison to Switch’s more seasoned components, Xbox and PlayStation consoles use more sophisticated silicon with comparably lower yields. However, even the supply of those consoles has grown recently, with inventory now more frequently showing up on store shelves.

Nintendo’s Q3 FY2023 financial results show that 14.91 million Switch units were sold across its three Switch SKUs in the first three quarters, a 21.3% year-over-year decline in sales during the holiday season. Early in the year, Nintendo blamed production problems for its hardware sales results and stated that going into 2023, the production of the Switch was “uncertain.” At least for its current console lineup, that doesn’t seem to be the case anymore.

Additionally, software sales fell 4% year over year, with 172.11 million units sold by the end of Q3. Overall, Nintendo reduced its fiscal year hardware sales forecast from 19 to 18 million units and reduced its software sales forecast by 5 million. By the end of March, the company now anticipates selling 205 million software units overall.

Switch is still selling well, despite a slowdown in sales; it has now surpassed Game Boy and PS4 in the list of all-time best-sellers. However, a decline like this is not unexpected given that the console will soon enter its seventh year on the market. Investors’ attention will undoubtedly be focused on any upcoming hardware announcements from Nintendo.