Nintendo in need of new console

Switch sales as low as ever, as console shows its age

Recent reports show that gross profits for Nintendo have declined by over 6% in the last twelve months to $6.6 Billion (¥885.4 billion). The Japanese games company has largely put this low performance in sales down to manufacturing issues, such as supply trouble with hardware semiconductors.

This issue mixed with the reality that the Switch console has been on the market for almost seven years now and the fact that most game developers are currently seeing a decline in sales after an initial post-lockdown sales boost, can all be seen as contributing factors.

For the fiscal year ending in March 2023, Nintendo originally predicted Switch to be roughly 21 million units worldwide. This estimated figure is already an almost 9% decrease from the previous financial year. However, actual sales totals were just under 18 million units sold, which is a more than 14% deficit from the original forecast and over 20% lower than overall sales figures for 2022.

As far as the highest-selling games for Nintendo this past year, Pokémon Scarlet and Violet have reportedly sold over 22 million copies since its launch in November. Since its release in September, the third-person shooter Splatoon 3 has sold more than 10.5 million copies. Not far behind is Nintendo Switch Sports, which has sold almost 10 million copies.

The Mario franchise is always one of Nintendo’s best sellers and Mario Kart 8 Deluxe has been no exception. Over the past year, the racing title has accumulated around another 8 million units sold and currently sits as Nintendo’s best-selling Switch title of all time with almost 54 million copies sold. This is over 10 million more than the second bestselling Switch game, Animal Crossing: New Horizons, which has sold a total of 42.2 million copies.

With 35 titles selling over one million copies throughout the last fiscal year, 22 of which were published by Nintendo itself, the Nintendo Switch is now the first Nintendo console to sell over 1 billion games, beating the Nintendo DS which sold around 950 million.

Even though both hardware and software sales are down, sales of downloaded games saw a substantial increase. Overall digital game revenue rose by nearly 13% to $3 billion (¥405.2 billion). In total, downloads amounted to almost 50% of all games sold in the past year, an 8% increase from the year before.

Even though declines are forecast to continue, with the upcoming releases of The Legend of Zelda: Tears of the Kingdom, Pikmin 4, and DLC for Pokémon Scarlet/Violet, Nintendo is optimistic these titles will drive profits forward heading into 2024.

Even though the Nintendo Switch is one of the bestselling videogame consoles of all time, the sales currently are not good. With the recent success of the PS5 and Xbox Series X/S, Nintendo now needs to come up with a successor fairly quickly if it wants to keep up with its competitors.

With nearly 18 million consoles sold this fiscal year, the total sales figures for the Nintendo Switch are currently over 125 million units sold since its 2017 launch. Despite this impressive figure, with over 20% fewer Switch consoles sold this fiscal year, the downward trend is clearly evident and will only get worse over time.

By the end of the fiscal year of March 2021, the Nintendo Switch was at its sales peak, selling almost 29 million units. This figure was greatly elevated by the increased demand for entertainment during the Covid-19 lockdowns when gamers were forced to stay at home.

With overall revenue expected to drop another 10%, Nintendo might need to find new creative ways to make money, be it by cutting prices on titles and increasing deals on its eShop market, or the release of more AAA titles or remasters of beloved classics.

With the highly anticipated The Legend of Zelda: Tears of the Kingdom scheduled for release this week and the new Super Mario Bros. movie already grossing over $1 billion at the box office, these two legendary Nintendo IPs will be the main driving force to boost sales for the rest of the year.

On top of this, the company has yet to indicate whether or not it will be launching a new console anytime soon. So, the success of the new Legend of Zelda title and Super Mario Bros movie will be pivotal for Nintendo’s revenue and a major dictator in the direction they choose to go moving forward.