After shipping around 21 million Switch consoles in the fiscal year that ended in March, Nintendo Co expects to raise manufacturing of its six-year-old Switch platform in the following fiscal year, according to individuals familiar with the situation.
The Kyoto-based company, which had reduced its console sales target to 19 million units in November due to component shortages, is now confident it can produce more, according to the people, who asked not to be identified because the discussions are private. At this late stage in the console’s lifecycle, the decision to increase output is an unexpected step.
Although it has not yet provided a specific target, Nintendo has informed suppliers and assembly partners that it plans to produce more Switch systems in the fiscal year beginning in April. If demand is weak, it might reduce its plans later in the year.
Analysts anticipate a decline in sales, but Nintendo’s strategy implies it anticipates continued demand for at least another year. According to Nintendo executives, supply problems have slowed the console more than a decline in demand for the $199.99 starting price.
Even with an increased supply, sales during the most recent holiday season were not very robust, according to UBS Securities analyst Kenji Fukuyama. People will soon start making predictions about the upcoming hardware and are probably going to hold off on purchasing the current model. It is inevitable that Switch’s sales momentum will slow down.
The release of high-profile games, like Animal Crossing: New Horizons during the epidemic, has historically been a key factor in the success of Switch system sales, and Nintendo has numerous games from successful franchises, including the Zelda series, coming out in 2023.Also read: –https://thesangerherald.com/2023/01/21/google-cut-12000-jobs-tech-layoffs/
If Nintendo achieves its 19 million unit sales goal for this fiscal year and surpasses it in the following one, the Switch would have sold close to 150 million units overall, the only home console to date to have sold more than that: Sony Group Corp.’s PlayStation 2.
The electronics industry has experienced a decrease in semiconductor and component shortages recently, and Sony executives have expressed optimism that the PlayStation 5 system would be considerably more widely available in 2023 than it was in the past.
According to Hideki Yasuda, an analyst at Toyo Securities, Nintendo can increase its Switch sales in the upcoming year, particularly if it boosts them with special editions of the console that are based on video games. Last year, the business released a Splatoon 3 edition of its most expensive Switch OLED model, adorning the hardware with graphics from the well-known third-person shooter and boosting sales.