Although there is still a lot of demand for the Switch, Nintendo is reportedly preparing to reduce sales of one of its gaming devices. What's the matter?
According to Nintendo Life, according to a Nikkei Asia report, the Japanese video game giant is estimated to have sold "only" about 20 million Switch game consoles in the current fiscal year.
The figure dropped to 10% from fiscal year 2021. According to the Nikkei, this was due to a shortage of semiconductor components and disruptions to the logistics network that hampered production. Compared to 2020, this figure is down 30% where Switch sales peaked at 28.83 million units.
The number of Switches sold in fiscal year 2021 is estimated to reach 23 million units, down 20% from the previous year.
That fiscal year, Nintendo initially planned to produce a record 30 million consoles, but the global chip shortage made it difficult to get microcontrollers and other products, and the company lowered its production estimates in the fall.
Handheld switches have been on the market for six years, but demand remains solid. The new model launched in October features screens with improved color reproduction and continues to experience shortages in some stores.
The Kyoto -based company wants to start increasing production, but prolonged chip shortages and disruptions in the global supply chain exacerbated by Russia's invasion of Ukraine will have an impact on production.
Meanwhile, China, where Switch is manufactured is struggling with a rising Corona virus outbreak. The supply chain there has been disrupted by a lockdown in Shanghai, thus disrupting the production and delivery of spare parts and materials. If the lockdown is extended, Switch sales in fiscal 2022 could fall below 20 million units.
Nintendo has transitioned its home consoles to a new generation every five or six years, but Nintendo President Shuntaro Furukawa explained that the current generation is still in the middle of a cycle.
Therefore, to offset the decline in console sales, Nintendo plans to sell more software.
According to gaming magazine Famitsu, sales of Nintendo and Pokemon software packages in Japan in fiscal 2021 reached 13.38 million units, maintaining the previous year's level, when Animal Crossing: New Horizons became a big hit.
This year, Nintendo plans to release a new version of the popular Splatoon game in September, and a new Pokemon title by the end of the year.
"It will be at an all -time high," said a Japanese securities analyst.
Another challenge is stabilizing revenue by expanding subscription -based online services like its competitor, Sony Group.