Nintendo Says Switch Chip Shortage ‘Largely Solved’ As It Lowers Forecasts
As part of Nintendo’s nine-month financial report for fiscal year 2022/23, the company said supply issues that had held production back for several years had been “largely resolved” in the final months of 2022.
Commenting on Nintendo Switch sales in his explanatory materialsthe company says the global semiconductor shortage and supply chain issues that have plagued consumer electronics manufacturers for some time had little impact on its production between October and December last year.
Between October and December 2022, during the holiday season, the effects of the shortage of semiconductors and other components were largely eliminated, and shipments generally went according to plan. However, sales have declined compared to the same period last year when the Nintendo Switch model, OLED, was released.
The Switch uses more mature technology than the more powerful Microsoft and Sony systems, so the lack of supply may have had less of an impact on Nintendo than its video game rivals. Xbox and PlayStation consoles use more advanced silicon with comparatively lower output than more mature Switch components. However, even the shipments of these consoles have increased in recent months, and now they are increasingly appearing on store shelves.
According to Nintendo’s financial results for the third quarter of fiscal year 2023, Switch sales were down 21.3% year-on-year over the holiday season, with 14.91 million units of the three Switch SKUs sold in the first three quarters. Earlier this year, Nintendo cited manufacturing issues as a factor in boosting hardware sales and was “uncertain” about Switch production in 2023. That doesn’t seem to be the case anymore, at least for her existing line of consoles.
Software sales were also down 4% year-on-year, with 172.11 million units sold by the end of the third quarter. Overall, Nintendo changed its overall hardware sales forecast for the fiscal year from 19 million to 18 million units, and cut its software sales forecast by 5 million. The company now expects to sell 205 million units of software by the end of March.
Although sales are slowing, the Switch is still doing well – it has now overtaken the Game Boy and PS4 in the all-time best-seller charts. However, given that consoles will soon be in their seventh year on store shelves, this decline is hardly surprising. All investors’ attention is likely to be focused on potential announcements of new hardware from Nintendo next year.