Following the dip in sales the game console company reported for their Q1 2022-2023 financial report, Nintendo President Shuntaro Furukawa expressed that the continuing component shortage in the current fiscal year makes Nintendo Switch production 'uncertain' for next year.
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Following a report from Nintendo Life, Nintendo reported a 22.9% decline in profits for the second quarter of 2022. The multinational company was quick to assure the public that the semiconductor supply shortage that they are experiencing is set to recuperate come the summer and autumn period.
A past report from Gamenguide has already mentioned how Nintendo recently pulled the plug on the supposed new Nintendo Switch release this year. This pronouncement from the console company also follows the said plunge in sales in the previous quarter of this year. The same report told us that Nintendo is looking to sort out its chip shortage problem, and they see it as an immediate goal.
According to a report from Nikkei, Nintendo President Shuntaro Furukawa said that the console giant is currently not considering raising prices for the Switch despite its current production and sales issues at hand. The Nintendo exec told Nikkei that the company wants to 'avoid pricing people out. While this may be good news for people planning to buy Nintendo products this year, the exec also expressed how they are 'uncertain' about the production of the flagship product Switch this year.
Nintendo President: 'Price Increase Is Not an Option'
Despite the year-over-year decline, Nintendo reportedly produced a net profit of 118.9 billion yen (USD $893 million) during the first two quarters of the current year. This sum can be attributed to the depreciating value of the yen. Even so, the company is still upbeat about its 340 billion net profit prediction for the first quarter of 2023.
Furukawa also explained that the company is on track to an improvement of their semiconductor procurement from the latter half of this summer. This is in cooperation with various business partners. The president said that the company only has a clear production outlook for this year and that they are 'uncertain' of the future of their production. In the same interview, Furukawa said that keeping prices down even though various issues are not giving the company any trouble with procuring semiconductor components. He pointed out that the problem is that demand exceeds supply.
POTUS Signs Chips and Science Act to Address Semiconductor Shortage
Gadgets companies like Nintendo are not alone in addressing the issue of a fluctuating supply of semiconductors. Recently, the Biden administration signed the CHIPS and Science Act which is the US government's answer for the economy taking a toll because of a shortage in chips and components. NPR explains that the signing of the new law will allocate more than $50 billion to bring semiconductor chip manufacturing to the U.S. and away from its current production hub in East Asia. This means that the US government is prioritizing research and development for the semiconductor industry. Despite these recent developments, game console companies have yet to comment on the law's potential effect on their production.
In an interview with Nikkei, the Nintendo president mentioned that they will try to keep up the company's sales at the same pace. He also stated that having hit software also gives the company a boost in hardware. It is predicted that its new lineup of games, Splatoon 3, Pokemon Scarlet, and Violet, which are set to be released in the following months, will help Nintendo in meeting its previous sales forecast.
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