Nintendo slashes Switch sales forecast amid chip shortage

Yahoo Finance Live anchors discuss Nintendo's revised Switch sales outlook.

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BRIAN SOZZI: All right, Nintendo losing momentum into the holidays. The Kyoto-based gaming giant reported weak earnings amid the decline of the yen and slashed its fiscal year forecast for its Switch console sales by 10% to 19 million. It sold fewer Switches in the quarter compared to the prior year. Part of that due to prolonged chip shortages.

And, Brad, it hasn't been a good week for the entire video game sector, outside of Activision calling out a strong-- I believe it was billion dollar plus start to the latest "Call of Duty." Take-Two, bad quarter. Zynga inside Take-Two, not that great. Now you have Nintendo out here with this warning.

BRAD SMITH: Yeah, I hate to keep coming back to the same data point, but the average bookings for average user, that being down and signaling some of the pressure that all of these companies are feeling, that's really the pass-throughs, the common denominator here. However, for the Nintendo Switch, they rose to fame back in 2017. They couldn't even produce units quickly enough in order to put them into the market. And so now it is a question of on the console side. If you're seeing more of the consumer appetite to really go back towards the cloud and be extremely selective in a down economic environment about the consoles that they do take on, what does that mean for a Switch that-- I mean, it's been out in the market.

BRIAN SOZZI: The graphics have never been where they need to be on Nintendo.

BRAD SMITH: In the Switch?

BRIAN SOZZI: Yeah, they need to pick it up.

BRAD SMITH: Well, they were looking at some streaming partnerships as well at one point too.

BRIAN SOZZI: Yeah, they better.