Nintendo Co. said Tuesday its net profit for the year ended March fell 9.4 percent from a year earlier to 432.77 billion yen ($3.2 billion), the second straight year of decline, pressured by a fall in its Switch game console sales.
Operating profit decreased 14.9 percent to 504.38 billion yen on sales of 1.60 trillion yen, down 5.5 percent.
The Japanese gaming giant sold 17.97 million Switch console units last fiscal year, down 22.1 percent from 23.06 million units a year earlier. A production bottleneck due to a chip shortage and weaker-than-expected demand during the year-end shopping season led to the drop in sales, it said.
Sales of Switch software saw a smaller decline of 9.0 percent to 213.96 million units thanks to solid demand for popular titles, including "Splatoon 3" and a "Pokemon" series.
The lackluster results came after Nintendo logged a record net profit of 480.38 billion yen for fiscal 2020 as lockdowns and restrictions on outings during the coronavirus pandemic boosted game sales worldwide.
"We are working on research and development" for a successor console to Switch, President Shuntaro Furukawa said at a press conference without elaborating.
As demand for its games falls back in line with the relaxation of COVID-19 restrictions, the Japanese company is ramping up efforts to lift sales in other businesses, such as movies, and increasing its official stores that sell games and character goods.
"The Super Mario Bros. Movie," a film based on the popular game characters that premiered this spring, has become a blockbuster.
Furukawa said he hopes the movie's success will positively affect the company's main business, saying, "I hope people who saw the movie take an interest in games, too."
For the current fiscal year ending March next year, the company expects its net profit to drop 21.4 percent to 340 billion yen and sales to slide 9.5 percent to 1.45 trillion yen as it anticipates a further drop in Switch sales.
The company said sales of the console will fall 16.5 percent to 15 million units in fiscal 2023, with those of its software also expected to slump 15.9 percent to 180 million units.
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