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While the pandemic closed down almost the entire economy, the electronic sector was the only empire that was left standing. Surprisingly, the electronic sector gained tremendous growth and Nintendo was among the companies benefiting from the situation.
Throughout the pandemic, Nintendo experienced an uptrend in terms of its sales. However, the roller-coaster ride that Nintendo was on is coming to an end.
It was on Thursday, August 12, 2021, when Nintendo went ahead and shared its earnings report. The report shared by Nintendo was for the second quarter of 2021, which ended on June 30, 2021.
In the earnings report, Nintendo has reported that it has experienced a drop in its sales in the second quarter of 2021. The game developing giant reported that in the second quarter of 2021, its sales have experienced a 10% drop.
This goes to show that the impact of the pandemic has finally started to wear down. As the pandemic is fading away and the vaccination is spreading globally, people have started coming out of fear of the pandemic.
People have started moving out of their houses, which is why indoor activities are becoming less popular. During the pandemic, the indoor activities involving entertainment were unusually high. However, with the pandemic going away, the indoor activities are coming back to normal.
As people are leaving their houses and going for outdoor activities, the sales for companies such as Nintendo are going down. With fewer people staying at home and playing video games, the high-trend of sales for Nintendo alongside other gaming developing giants are going down.
Nintendo has announced that in the second quarter of 2021, its revenue was 119,752 billion yen, which at the time of writing is $1 billion. As compared to the same quarter of 2020, the revenue for Q2 2021 has experienced a 17% drop. Nintendo has revealed that the major impact it recorded was for the sales of Switch consoles, which experienced a huge slump.
Nintendo revealed that it only managed to sell 4.45 million units for the Switch console in the second quarter of 2021. As compared to the second quarter of 2020, Nintendo’s sales for Switch experienced a 22% drop. In the second quarter of 2020, Nintendo had recorded 5.68 million sales for the Switch consoles.
Nintendo has confirmed exactly which version of the Switch console has caused a downfall in its sales. The company has revealed that while its Nintendo Switch recorded 8% higher sales compared to the same quarter of last year, the problem came from Switch Lite. According to Nintendo, its sales for the Switch Lite were more than halved in the second quarter of 2021.
For now, Nintendo has not taken any impact on its share prices but it is being expected that its share prices may end up facing a downfall due to its earnings for Q2 2021.
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