Nintendo’s profits drop after supply chain issues hamper Switch console production

Gaming giant Nintendo said lower sales and profits in its latest financial results were due to global supply chain issues affecting production of its popular Switch console.

The Japanese company said overall sales as of June 30 fell 4.7% compared to the same period last year, with unit sales of the Switch family of consoles dropping 22.9% due to a shortage of chips affecting production.

As a result, profits fell 15%, with the company pointing to ongoing global supply chain issues, particularly with electronic components such as semiconductors, as a key part of the problem.

“Due to delays in the supply of components such as semiconductors this year, we were unable to conduct production as planned,” Nintendo said.

“However, we expect purchasing to gradually improve from late summer into the fall, giving us a clearer outlook for production for the remaining calendar year.

“Ahead of the holiday season, we will leverage appropriate shipping methods and work to deliver as many Nintendo Switch systems as possible to consumers in every region.”

Many companies around the world have been hit by supply chain issues in the wake of the pandemic, with lockdowns and illnesses leading to staff shortages in manufacturing hubs such as China, which have slowed production of items, including computer chips.

The Nintendo Switch has been a huge success for the company since its launch in 2017, with Nintendo reporting that it now has over 100 million Switch users.

The hybrid system can be used as a portable and mobile gaming device, as well as docked and used as a home gaming system.

It’s since spawned two other models – a handheld-only Switch Lite and a more premium Switch OLED model, which has a better, bigger screen.

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