Hardware sales are shrinking at Nintendo due to a lack of semiconductor components and other factors.

According to the company's fiscal results for the full year ended March 31, 2022, net sales dipped by 3.6 percent to 1.69 trillion yen ($12.9 billion) and profits decreased by 0.6 percent to 477 billion yen ($3.6 billion).

Digging into the Nintendo Switch business, hardware sales decreased by 20 percent year-on-year as a result of those aforementioned component shortages and the ripple effect caused by the success of Animal Crossing: New Horizons, which was a major driver of hardware sales in the previous fiscal year.

Despite that downturn, Nintendo said the Nintendo Switch, OLED Model, and Nintendo Switch Lite delivered "strong" sales in each region, and "demonstrated a good balance between each of the three individual models."

Overall, full-year Switch sales totalled 23.06 million units across the entire console family, taking lifetime sales to 107.65 million units.

Software sales, meanwhile, increased by 1.8 percent year-on-year to 235.07 million units, which is the highest annual software sales total ever posted for a Nintendo platform to-date.

Pokemon Brilliant Diamond and Pokemon Shining Pearl drove that upswing, selling a combined 14.65 million units during FY2022. Other notable top-selling titles include Pokemon Legends: Arceus (12.64 million units), Mario Party Superstars (6.88 million units), and The Legend of Zelda: Skyward Sword HD (3.91 million units).

Catalog titles also continued to perform well, with Mario Kart 8 Deluxe selling 9.94 million units (for lifetime sales of 45.33 million units) and Animal Crossing: New Horizons selling 6.01 million units (for lifetime sales of 38.64 million units).

Sales within the company's digital business increased by 4.5 percent to 359.6 billion yen thanks to the performance of add-on content, sales of download-only titles, and sales related to Nintendo Switch Online. Overall, Nintendo suggested the business has been "performing well."

On the mobile front, Nintendo said that many consumers "continued to enjoy" its smartphone roster, but noted that mobile and IP related income decreased by 6.5 percent year-on-year to 53.3 billion yen.

Looking ahead, Nintendo is forecasting net sales of 1.6 trillion yen and profits of 340 billion yen for the next fiscal year ending March 31, 2023. The company explained the release of key titles including Xenoblade 3, Splatoon 3, and Pokemon Scarlet and Pokemon Violet will allow it to hit those targets.

Off the back of those financials, Nintendo also announced a 10-for-1 stock split to increase the liquidity of its shares and expand its investor base. The split is due to take place on September 30, 2022.