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Nintendo Reports Drop In Sales For Q1- Should We Be Worried?

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Image: Nintendo Life / Damien McFerran

Nintendo has released its financial results for the three months ended June 2022, reporting an operating profit loss and a drop in both hardware sales and software sales.

In terms of its net sales, Nintendo reported a total of 307.4 billion yen, which is down by 4.7% YoY. Hardware sales specifically totalled 3.43 million units, signalling in a drop of 22.9% YoY, while software sales totalled 41.41 million units, dropping 8.6% YoY.

Nintendo’s mobile business also took a bit of a hit, with income from smart-device content declining YoY, resulting in a decrease of 16.8% for a total of 10.9 billion yen.

Operating profit declined by 15.1% to 101.6 billion yen, however net profits were up by 28.3%, totalling 118.9 billion yen. Nintendo states that this is in part due to foreign exchange gains of 51.7 billion yen on the yen’s depreciation at the end of the first quarter when compared to the same period last year.

Looking at the reasoning behind the overall decline in sales, Nintendo highlights that the ongoing semiconductor shortage has significantly hit its production line, and the company has been unable to conduct production as planned. This means that fewer units have been shipped during the period, resulting in a decline in sales.

Nintendo recently stated that it currently has no plans to raise the price of the Nintendo Switch in its native Japan due to the weak yen, in contract to many other electronics companies such as Apple.

Read More: Nintendo Rules Out Any Price Increase On The Switch In Japan… For Now

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So, should we be worried? Well, no, not really. Nintendo places much of the blame for its drop in sales on the semiconductor component shortages, however it claims that it expects availability and procurement to gradually increase over the course of late summer going into autumn/fall. It claims it will leverage appropriate means of shipment in order to ensure as many Switch consoles are delivered to regions in preparation for the Holiday season.

In addition, of course, the coming months include a number of high-profile releases, including Splatoon 3, Bayonetta 3, and Pokémon Scarlet and Violet. Nintendo reconfirmed the launch windows for its major upcoming first-party titles as part of its financial update.

Read More: Nintendo Reconfirms Release Windows For Major Upcoming Switch Games

So, what do you make of the drop in sales reported by Nintendo? Do you think its fortunes will turn as the semiconductor availability improves? Share your thoughts in the comments below.

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