The Switch has outsold the PS4, but Nintendo sees tougher times ahead

The Switch just surpassed both the Game Boy and the PlayStation 4 to become the third best-selling console of all time. The console has sold 122.55 million units in total by the end of 2022, Nintendo announced in its earnings reportso it is now behind only the DS and PlayStation 2 in lifetime sales.

However, that’s the only silver lining in a darker cloud. Switch unit sales for the nine-month period ended Dec. 31 fell to 14.91 million from 18.95 million a year earlier, and revenue declined 5.6 percent for the fiscal year ending in March. Game sales also fell 4 percent during the same period, with the new Pokemon Scarlet/Violet titles unable to compensate for the fall. As a result, the company lowered its fiscal year forecast from 19 million to 18 million units with 5 million fewer sets, continuing the downward trend of last year.

Nintendo attributed the drop to continued semiconductor shortages, with the lack of consoles also hurting software sales. However, Sony set a new sales record for PS5 last quarter with 7.1 million sold, up 82 percent year-over-year.

Nintendo’s problems are likely to come down to its outdated hardware as well. Buyers are going for the latest OLED model, and the older Switch and Switch Lite models are seeing a decline. The Switch is now relatively underpowered compared to the latest Xbox Series and PS5 consoles, and Sony and Microsoft are also pouring money into games and subscriptions.

Nintendo said last year that the transition to its next console is “an important focus for usand it could start to become more urgent soon. It will be interesting to see if the Switch can hang on long enough to become the best-selling console of all time, but Nintendo will need to sell around 33 million more units to surpass the Playstation 2.