Nintendo Switch sales down by 22 percent as hardware loses momentum

gamedeveloper.com:

The Nintendo Switch has now sold over 125 million units worldwide, but Nintendo has warned that hardware sales are slowing down.

According to the company's fiscal report for the year ended March 31, 2023, hardware sales dropped by 22.1 percent year-on-year to 17.97 million units.

Software sales, meanwhile, decreased by 9 percent year-on-year to 213.96 million units, although Nintendo not that unit dales of first-party software were at the third-highest levels since the Switch launched in March 2017. The company also commended the "strong" sales of new titles and "solid" performance of catalog titles.

In monetary terms, consolidated net sales declined by 5.5 percent year-on-year to 1.6 trillion yen ($11.8 billion), while net profit declined by 9.4 percent to 423.7 billion yen ($3.2 billion) over the same period.

Digging into those numbers, Nintendo said that hardware sales declined due to the "shortages of semiconductors and other components impacted production until around the end of summer," and noted that it didn't experience the same sales growth during the holiday season.

The Japanese company also pointed out that the best-selling Switch console, the OLED model, has a lower profit margin than the other models in the Switch family of system, which resulted in gross profit margins falling by 0.5 percent year-on-year to 55.3 percent.

As the graph below shows, the OLED Model was the best selling Switch variant across each quarter of FY23, and accounted for 9.22 million (so over half) of the Switch's 17.97 million annual sales.

Nintendo described the sales situation for software as "stable," and suggested the downturn was "affected to some extent" by the decline in hardware sales. Pointing to the success of individual