This quarter, Nintendo’s hardware sales decreased 19.2 percent, in part because of a chip shortage.
Nintendo might be preparing to foray more deeply into the mobile gaming sector to offset a drop in Switch sales. Along with the release of its earnings report on Tuesday (PDF), the business also disclosed a partnership with DeNA, a major mobile game developer from Japan that worked with Nintendo to co-develop several games for iOS and Android, including Super Mario Run, Fire Emblem Heroes, Animal Crossing: Pocket Camp, and Mario Kart Tour.
The joint venture will create Nintendo Systems Co., Ltd, a new business that will launch in April 2023. The initial partnership between Nintendo and DeNA took place in 2015, and according to Nintendo, the deal will “strengthen the digitalization of Nintendo’s business,” which has already been extremely profitable for the firm. Sensor Tower statistics from May showed that the global lifetime sales of its mobile games had reached approximately $1.8 billion. According to a Sensor Tower analysis from June, Fire Emblem Heroes, which was initially released in 2017, became the first of Nintendo’s mobile games to achieve $1 billion in worldwide player expenditure.
Switch sales fell sharply in Nintendo’s earnings report, falling 19.2 percent year over year. The business attributes the decline to the chip scarcity, which also had an impact on Switch sales for the entire year of 2022. Nintendo narrowly reached its Switch sales goal in May and reported a 23 percent drop in Switch sales from the previous year in August. Since then, the video game juggernaut has cut its prediction for Switch sales by 10%.
Nintendo hasn’t collaborated with DeNA on a new mobile game since 2019. In collaboration with the creators of Pokémon Go, Niantic, it released Pikmin Bloom for Android and iOS. In the six months after its release, it generated $5.3 million in income, according to Sensor Tower. However, it appears like things are beginning to slow down now, as demonstrated by Nintendo’s earnings report, which showed a 7.5% decline in mobile and IP-related revenues year over year.
As it tries “to supply as many consoles as possible to consumers in every corner of the world,” Nintendo will probably have a successful holiday season even with a downturn in hardware and mobile gaming sales. Additionally, it released Bayonetta 3 last month, and on November 18th, Pokémon Scarlet and Pokémon Violet will be available.