The Nintendo craze may be coming to an end.
Sales fell nearly 10% in the quarter ended June, indicating that fewer people stayed at home to play video games as some countries around the world reopened, according to the Japanese company.
When compared to the same period a year ago, operating profit fell more than 17% to 119,752 billion yen (roughly $1 billion), owing to lower Switch console sales.
During the quarter, 4.45 million Switch hardware units were sold, down 22% from the previous year’s total of 5.68 million.
While sales of the company’s flagship device, the Nintendo (NTDOF) Switch, increased by about 8%, sales of its less expensive cousin, the Switch Lite, more than halved.
The Kyoto-based firm attributed its struggles to “factors such as Covid-19-related logistics delays and the impact of the semiconductor shortage on production.” Despite experiencing some manufacturing issues at the time, it noted that it “had relatively plentiful inventories for Europe and North America” last spring.
In the most recent quarter, software sales also suffered a setback. “Animal Crossing: New Horizons,” the Switch title that was the pandemic’s breakout hit, was no longer the star, selling only 1.3 million copies compared to 10 million the year before.
For months, the game, which is set on a beautiful island and allows players to fish, catch bugs, and play with friends on the beach, was a best-seller, accounting for up to 40% of Nintendo’s total self-branded software sales last year.
The story now takes a completely different turn. “Even when we take out the impact of ‘Animal Crossing: New Horizons,'” software sales “exceeded those of the same quarter last year,” the company said in a statement on Thursday.
Nintendo had been a big winner in the pandemic-hit economy until recently, as people turned to its games and devices to stay entertained at home.
The company had been putting out blowout quarter after blowout quarter, with profits sometimes jumping 400 percent.
However, it had been dogged by concerns about how long it could maintain its hot streak, especially as the world began to look past the pandemic.
The company announced last month that a new console would be released this fall. In October, the Nintendo Switch OLED model will be released, providing users with an updated display of the company’s flagship device.
