The runaway success of the Switch 2 console drove up Nintendo Co’s net profit by more than 50 percent in the nine months to December, the Japanese video game giant said yesterday.
However, a global memorychip shortage, created by massive demand for artificial intelligence (AI) hardware, threatens to push up manufacturing costs for the Super Mario maker.
The Switch 2 became the world’s fastest-selling games console after launching to a fan frenzy last summer.
Photo: AFP
It is the successor to the original Switch, which soared in popularity during the pandemic when games such as Animal Crossing struck a chord during long COVID-19 lockdowns.
Both are hybrid devices that can be connected to a TV or used on-the-go.
“Nintendo Switch 2 got off to a good start following its launch on June 5 and unit sales continued to grow through the holiday season,” Nintendo said.
In the April-to-December period, net profit jumped 51.3 percent year-on-year to ￥358.9 billion (US$2.3 billion), it said, and revenue nearly doubled on-year to ￥1.9 trillion.
It sold nearly 17.4 million Switch 2 devices during the nine-month period.
However, the Kyoto-based company kept its annual unit sales target for the Switch 2 steady at 19 million, and also held its full-year net profit forecast of ￥350 billion.
Soaring prices for memory microchips — used in games consoles as well as cellphones, laptops and other electronics — is set to be a headwind.
Their prices have ballooned as chipmakers focus on meeting the huge demands of fast-growing numbers of AI data centers.
“Nintendo and other console manufacturers are publicly keeping quiet about the impact of the shortage,” gaming industry consultant Serkan Toto said.
However, “users can forget the past when consoles always became cheaper in tandem with component costs falling over time,” with price hikes potentially on the cards this year, he said.
Krysta Yang of the Nintendo-focused Kit and Krysta Podcast said that a Switch 2 price increase “is not out of the question,” but that Nintendo “would likely exhaust all other options” beforehand.
A lack of heavy-hitting first-party new games for the Switch 2 in coming months also risks hindering growth, although third-party titles such as Resident Evil Requiem should help fill the gap, she said.
Nintendo said it planned to release Mario Tennis Fever this month and Pokemon Pokopia next month.
While the company is diversifying into movies and theme parks, consoles remain at the core of its business.
The Switch 1 has sold 155.37 million units — overtaking the Nintendo DS to become its best-selling hardware of all time.
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