Nintendo Switch moves 22% fewer units but digital games sales are up

Nintendo today released its financial earnings reports for the 2023 fiscal year. According to the report, the company’s profits are down, as are sales of its primary device, the Nintendo Switch. Its forecast for next year shows the company expect these numbers to drop even more. However, it notes that digital product sales have gone up and now account for almost half of total software sales.

In Nintendo’s report, it sold 17.97 million Switch units in FY2023, down from FY2022’s 23.06 million. While the sales of the Switch OLED model have increased from 5.8 million to 9.22 million units, it’s not enough to offset overall decline in number of units sold. The company also noted that, while some individual games sold well, overall games sales declined 9% year-on-year, with 213.96 units of software sold in the last fiscal year.

According to Nintendo, the reason Switch sales have declined is because, “shortages of semiconductors and other components impacted production until around the end of summer, and we did not experience the growth in sales mainly during the holiday season that we saw in the previous fiscal year.” The company also attributed a 9% decline in software sales to this hardware slump.

Digital sales and the future

One bright spot in the report is that Nintendo’s digital sales have increased. More specifically, digital sales accounted for 405.2 billion yen, or 48.2% of total software sales. It’s increased from 42.6% in the previous fiscal year. Nintendo attributed this to a combination of a rise in packaged software and Switch Online sales, as well as the weakness of the yen.

That said, Nintendo’s forecast for the future is very conservative. The company’s outlook for fiscal year 2024 indicates it expects Switch sales to drop even further. It forecasts 15 million units sold, a decrease of almost 17%, and forecasts software sales to similarly decline by 16%.

The notes on its presentation read: “Nintendo Switch has entered its seventh year since launch, and while it will become more challenging to maintain the same sales momentum as before, our goal is to have more consumers continue to play Nintendo Switch for longer, leading to maximized sales. We aim to achieve this by maintaining high user engagement and conveying the appeal of not only new software titles but also titles released in previous years.”