Nintendo, like many other tech companies, is having trouble producing enough hardware to keep up with demand. This is due to a semiconductor shortage that doesn’t seem to have an end in sight.
During Nintendo’s investor Q&A, Nintendo president Shuntaro Furukawa went into more detail on the semiconductor shortage, and how it’s impacting Nintendo’s ability to make Switch hardware, thus leading to lowered hardware sales forecasts. You can see Furukawa’s statement on the matter below.
The financial forecast for the current fiscal year takes into account the present manufacturing and sales environments, and the following three explanations are the key points. The first point is the hardware sales units forecast for this fiscal year. As the global shortage of semiconductors and other parts continues, we are still experiencing difficulties in the procurement of necessary components. There remain uncertainties within our plans for hardware production. Considering this production situation, we decided to set our hardware sales units forecast at 21 million, which is a decrease of about 2 million units year-on-year.
…The third point is that we must account for the balance in supply and demand of components such as semiconductors, as well as the situation regarding logistics. The financial forecast for the current fiscal year anticipates a rise in manufacturing costs (due to an increase in the price of components such as semiconductors) and a substantial rise in the cost of shipping due to a supply-demand imbalance surrounding the transportation industry, affecting the transportation of hardware produced in preparation for the holiday season.
Regardless of semiconductor shortages, I think Switch sales are going to decrease from here on out, it's at what rate remains to be seen. They've peaked, they're at 107 million units sold currently, the best selling hardware of all time is the PS2 at 158 million.
If Switch hasn't peaked, then, it would mean it would sell at least 214 million units. I don't see that happening. It's actually past its peak in my opinion. You can see it looking at Japan sales week by week, or in the UK where hardware sales year-on-year so far this year are down 38%, and Switch is in second place. Sony and Microsoft have been far more affected by the shortages, right from when they launched their next gen consoles, and they are.
So Nintendo have been lucky in some ways with their timing of hardware and software releases. Though having said that, I think the semiconductor shortages have prevented them from releasing a Switch Pro, which could have boosted sales further, depending on what it was going to do. They may just go straight to Switch 2 instead. They might still be to release a Switch Lite OLED before the end.