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Nintendo Switch Is the Latest Victim of Holiday Shortages

Japan-based Nintendo is cutting its sales forecast for the Nintendo Switch by 1.5 million units.

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As holiday shopping ramps up, there's one item shoppers should get sooner rather than later: the Nintendo Switch.

picture alliance | Getty Images

On Thursday, Japan-based Nintendo cut its Nintendo Switch sales forecasts from 25.5 million consoles between April 2021 and March 2022 to 24 million. This nearly 6 percent decrease is due to the global chip shortage's effect on production.

“We can’t produce enough to meet the demand we are expecting during the upcoming holiday season,” Nintendo president Shuntaro Furukawa said at a news briefing. “Currently there is no sign of improvement and the situation continues to be severe so I can’t say how long it will continue."

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The Nintendo Switch's game lineup for the holiday season is also a concern for investors. Though Nintendo is releasing "Pokémon Diamond" and "Pokémon Pearl" remakes later this month, there aren't many highly anticipated games set to release before the end of the year.

“Our main concern is still a lackluster game pipeline combined with a sharply declining [amount of software bought by hardware owners] that is likely to drive earnings lower,” Jefferies analyst Atul Goyal wrote to CNBC.

Despite all of its worries, the company doesn't necessarily see profit loss ahead. Nintendo didn't drop its revenue expectations, and actually expects profits to be 4 percent higher than previously predicted. This optimistic outlook is because of account revisions in exchange rates and higher projected software sales.

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