Nintendo, the Japanese video game company based in Kyoto, declined by more than 7.5 percent in the first half of trading on the Tokyo Stock Exchange on Wednesday. The drop followed an announcement of softer profit in the nine months ended December, the fiscal period from April to December. The company reported a year over year decline in net profit by 5.8 percent and a 1.9 percent reduction in sales turnover, signaling a cautious outlook for the business.
Management attributed the softer performance to a slowdown in Switch console and game sales, which in turn led to lower hardware sales forecasts for the year. Production was further pressured by supply chain constraints, including chip shortages and other component delays experienced toward the end of the summer, affecting Switch production and the company’s ability to meet demand for both hardware and software legitimately tied to the console ecosystem.
Nintendo has not escaped the broader slowdown affecting the video game industry as the world recovers from the pandemic and grapples with new global challenges. As the Switch approaches its seventh year on the market, investor sentiment has grown more sensitive to potential software updates or new hardware offerings. In the meantime, the company announced a Nintendo Direct presentation during which it would share further details about its latest results. The event was scheduled to take place online shortly after the market closed and ahead of fresh product disclosures, with updates expected to address upcoming software and hardware initiatives for its growing ecosystem.