Nintendo Still Feeling Impact of Chip Shortage as Switch Sales Sag
The chip shortage isn’t over for Nintendo. On Wednesday, the company blamed decreased Switch console sales on continuing struggles to secure enough semiconductors.
The video game maker mentioned the chip shortage in its Q2 earnings report(Opens in a new window). “Hardware production was impacted by factors such as the global shortage of semiconductor components, resulting in a decrease in hardware shipments and subsequent decline in overall sales,” the company said.
During Q2, Nintendo’s hardware sales dropped 22.9% year over year. In particular, sales for the standard Switch console fell 60% while the Nintendo Switch Lite saw sales decline by 48%, bringing total sales volume to 1.91 million units, down from 4.45 million units the year before.
However, the company was able to make up some ground with the Nintendo Switch OLED console, which shipped 1.52 million units during Q2. Still, the company noted the OLED Switch model has a “lower profit margin compared to other models.” In addition, Nintendo is now paying more for components due to the chip shortage, bringing its potential profits down.
On the plus side, Nintendo expects the supply situation “to gradually improve from late summer towards autumn.” The company added: “In preparation for the holiday season, we will leverage appropriate means of shipment, and work to deliver as many Nintendo Switch systems as possible to consumers in every region.”
Still, it’s possible the economic downturn could stop consumers from buying the Switch console and Switch games. During Q2, Nintendo’s game unit sales also fell 8.6% year over year.
The semiconductor shortage has been impacting Nintendo since last year. But for now, consumers in the US don’t need to worry about the
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