Portmanteau of "Skill Issue", a phrase often used by gamers and social media users in general to point out someone's shortcomings, no matter the scale of the mistake(s) made. Modern equivalent of Epic Fail, Git Gud etc.
"Dude I can't even beat the first boss of Dark Souls, how do people speedrun this game?"
It is said of the situation where a person has the bad luck to make contact with his testicles against an undefined surface or object, intentioned or not.
Given the nature of the word, it is more appropriate to design cases where the interaction is made with a moving object, for example, a ball.
Although it is extremely painful for the victim, it tends to be considerably funny to people who witness it.
Today in the baseball game the pitcher took a nutshot; the baseball hit him in the nuts.
Man, I just watched the funniest nutshot video ever.