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Nintendo has lowered its Nintendo Switch sales forecast by 1 million units, after reporting a 31% year-on-year sales decline.
In its latest earnings report for the three months ended September 30, the Switch company said it had lowered its hardware sales forecast to 12.5 million for the fiscal year, down from 13.5 million, and lowered its operating profit forecast by 10% to ¥360 billion ($2.4 billion).
Nintendo partly attributed this decline in hardware sales to the strong first half of its previous fiscal year, when the Super Mario Bros. Movie. increased game sales, and The Legend of Zelda: Tears of the Kingdom was released.
“There were no such factors in particular in the first half of this fiscal year,” he said, “and with the Nintendo Switch now entering its eighth year since launch, unit sales of both hardware and software declined significantly year over year.”
The Switch is now more than seven years old, and Nintendo says it will announce a replacement console before the end of March 2025.
The company's results for the first half of the current fiscal year reported operating profit of ¥121.5 billion ($798 million), down 56.6% compared to the same period last year.
The company confirmed that it sold 4.72 million Switch consoles during the first half of the fiscal year, bringing its all-time hardware sales total to 146.04 million. The Switch must complete 154 million (Nintendo DS) and at least 160 million (PS2) to become the best-selling console in history.
In software (covering April to September), Paper Mario The Thousand-Year Door released in May sold 1.94 million units, while Luigi's Mansion 2 HD released in June sold 1.57 million units. The Legend of Zelda: Echoes of Wisdom, which was released at the end of September, sold 2.58 million units on its opening day.
Looking ahead, the company released Super Mario Party Jamboree in October, and plans to release Mario & Luigi: Brothership this week, followed by Donkey Kong Country Returns HD in January, and a port of Xenoblade Chronicles X in March.
Dr Serkan Toto, CEO of Tokyo-based gaming industry consultancy Kantan Games, told VGC that with a weaker software lineup compared to previous years, a decline in sales of the aging Switch hardware is inevitable.
“Anyone who follows Nintendo this year will definitely be surprised by the results,” he said. “We're in a success-oriented business: Without blockbusters, you can't generate sales that will really have a positive impact on a company like Nintendo.
“It's understandable that the company is holding out for the best products for its next console, but I think their adjusted estimates are still too optimistic. Look at Q1 2025, for example, which only has one major release which is Donkey Kong Country Returns HD.”
Toto said the only positive surprise it could see was a jump in Nintendo's digital sales, which increased from 50.2% to 56.3% year-on-year, contributing to a 1.5% increase in gross profit margin.
More to follow…
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