Instead, the Financial Times reports, Nintendo is concerned about the impact that global chip shortages are likely to have on its production of the Nintendo Switch console. It could also potentially have a negative impact on the rumored Nintendo Switch 2, which many expect could debut some time this year.
The Global Chip Shortage
The global semiconductor chip shortage is the result of the whiplash effect that accompanied the coronavirus pandemic. In short, chip manufacturers were hit by the one-two punch of, initially, suppressed consumer spending at the start of the pandemic and then, soon after, a massive rush in demand for consumer electronics, ranging from tablets to games consoles.
Like the toilet paper shortage of 2020, companies are now panic-buying up as many chips as they can so as to have the necessary reserves they require. This has made chips even harder to obtain, and caused a big increase in their price—for everyone from car manufacturers to, yes, companies like Nintendo.
This bump in the road should even out over time. But for now it’s causing a big headache for the likes of Nintendo. As frustrating as it would be for the company if its products were failing to resonate with the public, even more frustrating is for it to have a product people love—and to potentially not be able to produce enough to satisfy would-be customers.
In Nintendo’s results statement covering the 2021-2022 fiscal year, the company says it expects that its current financial year net profits will decline by 29%. This is due to the decline it predicts in its sales of hardware. The company believes it will sell in the region of 25.5 million Nintendo Switch units during the period. That would be 3.3 million units fewer than it sold in the most recent financial year.
From Good to Disappointing
Due to the rise in consumer demand for devices like video game consoles during the pandemic, the past fiscal year was a good one for Nintendo. Unfortunately, it seems that may be followed by a disappointing year due to the lingering after-effects.
Hopefully some of those fears prove unfounded. Then again, publicly traded companies aren’t exactly in the habit of giving downbeat sales predictions just for the heck of it.
