Nintendo posted a substantial decline in profit and revenue for its last fiscal year as its smash-hit Switch console saw a drop in sales. 

The gaming giant’s financial year, which operated from April 2022 to March 31 this year, saw a 5.5% year-on-year decline in revenue to $11.8bn. 

In addition, Nintendo reported $3.2bn in net profit for the year, marking a 9% decline year-on-year.

The financial results come after the Japanese-based gaming giant managed to sell just 17.8 million Nintendo Switch consoles for the financial year. A 22% decline from the 23 million they sold in the financial year ending in March 2022. 

The gaming giant said it “did not experience the growth in sales mainly during the holiday season” which it had enjoyed in the previous year. 

Nintendo claimed production had been impacted until the end of summer due to “shortages of semiconductors and other components”.

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Benjamin Chin, analyst at GlobalData, told Verdict: “Component supply chains experienced major disruption during the pandemic, and the ongoing US-China tech war means semiconductor shortages are expected to continue throughout 2023.”

Decline in Nintendo Switch sales expected to continue

Nintendo has forecasted it will sell just 15 million units of its flagship Switch console by the end of March 2024. 

The Nintendo Switch has now been available to the public for six years, making it one of the older consoles on the market. 

The company’s rival, Sony, sold a record 19.1 million of its PlayStation 5 throughout the same financial year. However, the console has only been on the market for two years. 

“The Nintendo Switch is a unique device that can cater to both couch and on-the-move gamers,” Chin said, “however, with this ability came drawbacks to its computing power compared to its peers.”

“In the six years since its release, the console has become even less powerful than its competitors,” Chin added.

The aging console has sparked questions about whether Nintendo will announce a Switch 2 to keep the power of its hardware in-line with the rest of the market.

“In the meantime, Nintendo will be banking on its strong software lineup, which includes popular franchises like Super Mario, The Legend of Zelda, and Pokémon, to keep players interested,” Chin said.

GlobalData is the parent company of Verdict and its sister publications.