Aug 3, 2022 - Technology

Nintendo, like other game companies, reports sales decline

Screenshot of video game characters playing tennis

Nintendo Switch Sports. Screenshot: Nintendo

Sales of Nintendo games, consoles and other products dropped nearly 5% in the spring compared to the same period a year ago, according to the company's latest financial results.

Why it matters: It's another sign that the game industry has reached choppy waters after surging during the pandemic.

  • Nintendo's slowdown coincides with reports from Sony and Microsoft that growth in their PlayStation and Xbox business also declined this spring.

Details: Nintendo's sales for the quarter totaled ¥307.4 billion yen ($2.3 billion), down from ¥322.6 billion yen ($2.4 billion).

  • It sold 3.4 million Switch systems during the spring, a million fewer than a year ago.
  • The company attributed the drop to hardware production woes brought on by the global semiconductor shortage.

Nintendo's game sales slowed, too, declining from 45.3 million copies sold in spring 2021 to 41.4 million.

  • That's high by most company's standards, but part of a decline for Nintendo as new releases fail to match the fervor around 2020 phenomenon Animal Crossing: New Horizons. The company also shelved one spring release due to the invasion of Ukraine.

Between the lines: Nintendo's tiny mobile business took a disproportionately large hit, as the company has shown signs of losing interest in the sector.

  • Its revenue from "mobile, IP... etc" for the quarter dropped from ¥13.1 billion ($100 million) to ¥10.9 billion ($80 million). The company said the decline was from mobile.
  • In the past year, Nintendo wound down multiple mobile games, which it produces with external development partners.
  • Since 2019, it has only launched one mobile game, 2021's Niantic-developed Pikmin Bloom. (The Pokémon Company, which Nintendo partially owns, remains much more active in mobile.)

What's next: Nintendo is predicting better Switch supply in the future.

  • The company told investors that it expects procurement for hardware components to "gradually improve from late summer towards autumn," potentially loosening the supply chain pinch.

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