- Nintendo reported a decrease in profit and revenue in the fiscal year due to lower sales of the Switch home console.
- The Japanese gaming giant sold 17.97 million units of the Nintendo Switch series flagship console, roughly in line with its forecast of 18 million units for the fiscal year.
- For the fiscal year ending March 2024, Nintendo projected sales of 15 million units of the Switch.
Nintendo is hoping that major games like Mario and Zelda will help keep gamers interested in the old Switch Console series.
Charlie Triballo | AFP | Getty Images
Nintendo reported a decrease in profit and revenue in the fiscal year due to lower sales of the Switch home console.
For the full fiscal year, which ran from April 2022 to March 31 of this year, Nintendo reported revenue of 1.6 trillion yen, meeting its own expectations. This was a decrease of 5.5% year over year.
Nintendo reported a net profit of 432.7 billion yen for the fiscal year, down more than 9% year-over-year. However, it was better than the company’s forecast of 370 billion yen.
The Japanese gaming giant sold 17.97 million units of its flagship Nintendo Switch series of consoles, in line with its forecast of 18 million units for the fiscal year. That compares to more than 23 million Switch units sold in the fiscal year ending March 2022, down 22%.
Nintendo said that “shortages of semiconductors and other components affected production until around the end of the summer” and the company did not see “sales growth mainly during the holiday season” that it had seen the previous year.
For the fiscal year ending March 2024, Nintendo projected sales of 15 million units of the Switch.
Nintendo is competing with an older console with the Switch, which has been on the market for six years, with investors concerned that its sales may have peaked. The company twice had to lower its Switch sales forecast in the past fiscal year after a disappointing holiday season.
Over the life of the Switch, Nintendo has tried to update the console with a handheld version and one with an improved screen. This helped in the short term but did little to halt the general trend of declining sales.
In contrast, rival Sony reported its highest-ever profit for the year ending March 31st. The company also sold a record 19.1 million PlayStation 5 consoles in the fiscal year. Sony’s PlayStation 5 went on sale just over two years ago, so it’s still in its infancy.
Nintendo shares are up 3.6% this year while Sony stock is up 25%.
“Nintendo Switch has had a great run but it’s definitely past its peak,” Serkan Toto, CEO of Tokyo-based game consulting firm Kantan Games, told CNBC.
“Based on projections for the new fiscal year, I’m not expecting any miracles but rather a company that’s auto-starting and doing its homework to existing Switch users. Every console cycle comes to an end, and so does Nintendo, now in need of a new piece of hardware to revitalize its sales.”
The key for Nintendo now is how it continues to generate revenue from its 114 million annual users. The gaming giant has a solid portfolio of iconic games and characters from Pokemon to Mario.
However, Nintendo said software sales were 213.96 million units for the year ending March 31, down 9% year over year.
Nintendo is set to release The Legend of Zelda: Tears of the Kingdom on Friday, one of its most popular franchises.
The company expects software sales of 180 million units in the current fiscal year, indicating expectations of a further downturn.
Nintendo said it expects its net profit to fall 21.4% to 340 billion yen in the year ending March 2024.