Nintendo Co. on Thursday lowered its sales forecast for its Switch game console to 24 million units, down 1.5 million units, in the current business year through March due to a prolonged global semiconductor shortage.
However, supported by strong demand for games on the popular console, Nintendo upgraded its net profit forecast for fiscal 2021 even though the first half result through September was 19.4 percent lower than a year earlier at 171.83 billion yen ($1.5 billion) on sales of 624.27 billion yen, down 18.9 percent.
Referring to the chip crunch, Nintendo President Shuntaro Furukawa said the Japanese gaming giant "cannot produce enough to meet the anticipated demand" for the game console in the year-end shopping season.
"We expect the harsh situation to continue as there are no signs of improvement" Furukawa said in an online press conference.
The company expects a net profit of 350 billion yen for the full year. It compares with 340 billion yen initially projected in May, which represents a 27.1 percent fall from a year earlier.
Its operating profit is projected to fall 18.8 percent from a year earlier to 520 billion yen, but up from the earlier estimate of 500 billion yen. The sales forecast remains unchanged at 1.6 trillion yen, down 9.0 percent from a year earlier.
Although the supply-demand imbalance of semiconductors stemming from the coronavirus pandemic played a role, the main reason for sales and net profit in the April-September period falling was due to last year's smash hit "Animal Crossing: New Horizons."
As demand for stay-at-home entertainment exploded during the pandemic, the title launched in March 2020 sold more than 10 million units in the first half of last year.
In the first six months of this fiscal year, Nintendo's Switch console sales totaled 8.3 million units, down 34.0 percent, partly because the popularity of the game title last year prompted many people to purchase the hardware.
But the company said its new game titles released this business year, including "The Legend of Zelda: Skyward Sword HD" and "New Pokemon Snap," have been selling well.
Nintendo said it expects to sell 200 million Switch games in fiscal 2021, up 10 million units from the earlier projection.