Nintendo Co Ltd has announced its expectation to sell 15 million Switch game consoles in the financial year ending March 2024, compared with 17.97 million units sold the previous year. The Kyoto-based gaming company posted an operating profit of ¥504.38 billion ($3.73 billion) for the year ended on March 31, exceeding market estimates.
However, as demand slows for its aging console now entering its seventh year on the market and supply chain issues begin to ease, Nintendo faces increasing competition from rival companies such as Sony Group Corp., which is accelerating production and deliveries of its PlayStation 5 console.
This Friday marks a significant moment for Nintendo with the launch of "The Legend of Zelda: Tears of the Kingdom," one of this year's most highly anticipated games. Despite this upcoming release, some analysts remain skeptical about whether hit titles can continue to bolster sales figures for the Switch console as they have done in previous years.
For this fiscal year, Nintendo predicts an operating income of ¥450 billion ($3.3 billion), along with a deceleration in hardware sales. In comparison, over the past fiscal year (ending March), it reported an operating profit of ¥93.8 billion generated from selling roughly 17.9 million units.
Furthermore, no plans are currently underway for releasing a successor console within at least another twelve months – potentially prolonging concerns about future performance amidst rising competitors such as Sony Group Corp., aiming to sell more than 25 million PS5 consoles by end-year.
"The hybrid Switch console was once considered groundbreaking technology when released back in 2017," stated industry analyst Drishti Patel; "but we are seeing that interest dwindle faster than initially predicted."
One possible silver lining comes through Saudi Arabia’s Public Investment Fund (PIF): having recently built up its position in Nintendo to 8.3%, PIF has solidified its place as the largest external shareholder.
It appears that the future of Nintendo hinges on successful game releases and innovative new products for the Switch console, with many eagerly watching how it will respond to increasing market pressures from competitors like Sony Group Corp.