Nintendo ramps up Switch production to meet resilient demand

Nintendo plans to increase Switch production to meet elastic demand
Nintendo plans to increase production of its console d switchIt’s six years into the next fiscal year after nearly 21 million Switch consoles shipped in the year ending in March, according to people familiar with the matter.

The Kyoto-based company cut its sales forecast for the console to 19 million units in November due to component shortages, but is now convinced it can do more and demand remains strong, the people said, asking not to be identified because the discussions are not public. The move to ramp up production is an unexpected move late in the console’s life cycle.

The people said Nintendo has notified suppliers and assembly partners that it intends to produce more Switch units in the fiscal year starting in April, but has yet to announce a specific goal. You can revise your plans downwards later in the year if demand isn’t enough.

Analysts expect sales to decline, but Nintendo’s plan is that it expects sustained demand for at least another year. Nintendo executives said the console, which starts at $199.99, has been hampered more by supply problems than by low demand.

“Sales in the recent holiday season weren’t strong even as supply improved,” said Kenji Fukuyama, an analyst at UBS Securities. People will soon start speculating about next generation hardware and will likely refrain from buying the old system. It is inevitable that there will be a slowdown in the Switch’s sales momentum.”

A Nintendo spokesperson declined to comment.

Switch console sales have historically been driven by the release of landmark games like Animal Crossing: New Horizons during the pandemic, and Nintendo has several blockbuster franchise titles like the Zelda series set for release in 2023.

Alcanzar el objetivo de ventas de 19 millones de unidades de Nintendo para este año fiscal y superarlo en el próximo llevaría al Switch al territorio enrarecido cerca de 150 millones de ventas de por vida, una marca superada solo por PlayStation 2 de Sony Group Corp. consolas to date.

Shortages of semiconductors and components in the electronics industry have abated in recent months, with Sony executives expressing confidence that its PlayStation 5 console will be more widely available in 2023 than before.

Hideki Yasuda, an analyst at Toyo Securities, said Nintendo could boost its Switch sales next year, especially if it gives it a boost with special editions of the game-themed console. Last year, the company released Splatoon 3 on its pricier Switch OLED model, adorning the hardware with artwork from the popular third-person shooter and helping boost sales.

The company plans to release The Legend of Zelda: Tears of the Kingdom, the highly anticipated sequel to Breath of the Wild, a game that was synonymous with the Switch in its early days, in May. Yasuda said the Zelda-branded Switch will entice existing console owners to buy another one.