After the dizzying highs of the 2020/2021 financial year, the most recent financial results from Nintendo show an expected but relatively modest drop following the pandemic / lockdown-related boom. The results are still very strong, yet we're now into the sixth year of the Switch generation; as such Nintendo is forecasting an upcoming year of declines to match the older hardware.
First, let's summarise the key figures for 2021/2022, with percentage indicators in brackets for how they compare to the previous financial year.
- Net Sales
- 1695.3 billion Yen / approx $13 billion USD [-3.6%]
- Operating Profit
- 592.7 billion Yen / approx $4.56 billion USD [-7.5%]
- Net Profit
- 477.6 billion Yen / approx $3.67 billion USD [-0.6%]
Switch Hardware Sales - 23.06 million [-20%]
Switch Software Sales - 235.07 million [+1.8%]
Nintendo has cited the global chip shortage as a factor in the reduced hardware sales; the company had to reduce previous projections earlier in the financial year due to the issue. Software sales actually being up does show the continuing demand for the system and its games in a particularly positive light.
As we've mentioned, though, Nintendo is forecasting 2022/23 to be a down year across the board; below are its estimates across the same areas, with the percentage showing the expected declines compared to the most recent results (2021/2022).
- Net Sales
- 1600 billion Yen / approx $12.3 billion USD [-5.6%]
- Operating Profit
- 500 billion Yen / approx $3.84 billion USD [-15.6%]
- Net Profit
- 340 billion Yen / approx $2.61 billion USD [-28.8%]
Switch Hardware Sales - 21 million [-8.9%]
Switch Software Sales - 210 million [-10.7%]
While profits in the billions and over 20 million systems sold will be considered a positive on many metrics, the momentum is undeniable. There's little doubt that investors will be eager to know how the company plans to level out and start increasing sales and profits once again; yes, that'll lead to chatter about new generation hardware as the Switch slows down.
The software sales is also an interesting number, showing that Nintendo doesn't expect its line-up for the coming year to hit the same heights. This is perhaps understandable with two Pokémon releases (Scarlet and Violet) instead of three, and with Breath of the Wild 2 being delayed to either just before the end of the financial year next March, or potentially falling later in the Spring and missing the financial year entirely. We'd suggest these forecasts perhaps make a huge-selling upgraded system and Breath of the Wild 2 longshots for before 31st March 2023, but it's Nintendo so who knows.
The coming year could be all about maintaining Switch popularity, consolidation and preparing foundations for bigger years to come; it wouldn't surprise us if Nintendo pitches a similar line to investors, in any case.
[source nintendo.co.jp]
Comments 31
Can SOMEONE... PLEASE... get me a 'Doomed' in here?
WTF is going on? This article is 6 minutes old ffs.
Nintendo's annual net income by fiscal year (courtesy of @PillFencer):
Despite higher overall hardware and software sales during the NDS/Wii heyday, the Switch era is by far and away the most profitable period in Nintendo's history.
Hybrid platforms are clearly Nintendo's future.
I’m curious if there are more people like me. Switch was my main platform, but now that I have the Steam Deck, the switch is collecting dust.
Oh dear oh dear... this is a disaster. They reached a peak with Hotel Mario and it's been downhill ever since. Nintendoom & gloom folks!
Switch Sales down in double-digit percentages? Sorry folks, it's over. Nintendoomed.
Considering the lineup of the last fiscal year, these reductions definitely feel like the Switch's successor is being announced in fall 2022 for release alongside BotW 2 in Spring 2023.
@dewokkel
Yep, I gave my switch away soon as my deck turned up and I just cannot see myself playing it. Before you get the pitch forks out, I had more than my monies worth out of my switch. A friend of mine has a young lad and not a lot of disposable income, it was well worth letting him have it as he is over the moon.
Since Game Pass came along, I find that respects my wallet much more than many eShop offerings. From that perspective, I can understand this.
@Grumblevolcano
A 21 million hardware forecast for the current fiscal year is enormous and is a very small decrease from last fiscal year (23.06 million). If anything, it shows that no new hardware platform is scheduled for release anytime soon (and certainly not within this current fiscal year).
@Grumblevolcano Can we please stop with these theories. The numbers forecast are still phenomenal for a console so far into its lifespan. Nintendo have no need to release new hardware when the Switch, in all its various iterations, is still selling so well.
@westman98 The big software drop seems very odd especially with the upcoming lineup seemingly being a lot stronger than last fiscal year. So what came to mind was how the announcement of a Switch successor would result in fewer people buying Switch software as they wait for the successor.
@Grumblevolcano
Nintendo always underestimates their software forecasts, sometimes to absurd degrees
Last fiscal year, they forecasted 200 million software sales and ended up selling 235 million - the highest annual software sales of any Nintendo platform ever.
They’ve sold their 100 million. A highly successful product. Another 20, 30, 40 million units won’t change much within the company. Now the focus returns to marketing and starting from 0 units with a new generation. That’s when the ‘nintenDOOMED’ narrative can properly pick up again like it has in some form since the end of the NES. And who knows, just maybe another Wii U is in store. But likely Nintendo will avoid that.
@dewokkel I would love to be in the position to ignore my Switch due to my heavy Steam Deck usage... but they still haven't invited me to purchase one! The annoying thing is that I was there the second the pre-orders went live and got through to the payment page before it crashed... over and over again. Eventually got through after 45 minutes and am still waiting for the email to say I can actually buy the thing!
Overall though, the Steam Deck is always likely to be a fairly niche product and have very little impact on Nintendo's sales. I know multiple Switch owners and none of them even knew the Steam Deck existed before I mentioned the fact that I'd pre-ordered one.
@dewokkel My Switch was my preferred console until latest gen and then a lot of the games I wanted to play were too much for the Switch to run. Now that I have my Deck, it feels a lot like when I first had the Switch. Nintendo will always be the first party king but I think they neglect the initial appeal of the Switch at their peril.
That said, the game I’ve been playing most on my Deck has been Vampire Survivors, which I’m sure would run just fine on the Switch. Maybe the other factor is that a lot of good indies debut on Steam before they cross over to Switch which was the go to Indie handheld at one point.
The software sales would soar if they’d release more games, including a few very popular ones that were on 3ds but never made it to switch yet, such as: Nintendogs/Cats, Tomodachi Life, and Style Savvy.
@NinChocolate imo the wii u is the better console of the 2 so I'm more worried but nintendo doing another switch... (an underpowered indie machine)
So, based on these fiscal numbers, likely no Switch Pro/2 model will drop this year. Otherwise we'd see a jump in expectations.
@Deljo the Wii U edges out the Switch for me too. Although I’m fine with the power level.
Switch had a better 2021 than it did 2018 and 2022 will probably end up higher than 18, as well. That's pretty good. Helps that the console has consistent software support. And data suggests people still play Switch, as it has 100 million active users at the time of writing. That's impressive, any way you cut it.
@gcunit Nintendo Life runs “doomed” articles on the daily.
The Switch desperately needs a "Pro" performance boost or something because it's really looking outdated these days compared to it's rivals, and now that the Steam Deck is a thing it no longer has the handheld gaming market all to it's self.
I mean it's still got a niche appeal that is sure to last but the fact remains that a Switch Oled is $350 while both the Steam Deck and PS5 start at $400. What was once a very appealing and unique piece of hardware back in 2017 has slowly become dated and it needs something more than a fancier screen by now.
Nintendo? More like nintendoomed
@Grumblevolcano 21 million would be the by far biggest year 6 for any console ever and only a very small drop from last year. It doesn't indicate a new console coming soon.
@OnlyItsMeReid wtf what are you talking about man
@Deljo And the Wii U was not underpowered?
@JayJ lol, good one.
It's getting ever closer to an all time record blowout. 155 mil doesn't seem that far away anymore. If Switch 2 comes March 2022, they'll break the record (since Switch would be around 148 mil by that point, it would easily do another 7m after Switch 2 releases during the transition years) but if it comes in 2023, they'll land somewhere around 135m lifetime after transition sales. If it's a Pro model though, they'll landslide well beyond the PS2/DS.
@JayJ
I mean it's still got a niche appeal
Got it mixed up. Switch forecasts over 21 million this upcoming Fiscal Year. That's not niche. That's higher than the best year PS4 ever had. Steam Deck, with 100k sales per month, that is a textbook example of having niche appeal.
They'll be just fine. There's always ppl in fansite comment sections declaring how they need this, they need that, for reasons X, Y and Z, but at the end of the day, they're still crushing over 20 million units a year, so the broad consensus is it doesn't really need anything except for the games to keep coming. And they are.
Eventually it'll see a successor. Until then, it's gonna be just fine. Deck isn't competing, and neither PS5 or Xbox Series are doing half the numbers Switch is slated to do this year (PS5 projects 11.5 mil). Unless and until we see sales drop below 10m per year, they don't need to do anything.
@westman98 Is this adjusted for inflation?
@NintendoWife
No but that wouldn't change my overall point
@westman98 I was gonna say yes it would, but I realized the chart is in Yen.. looked up the Yen between 1980 and today, and they didn't actually have a lot of inflation.
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