Nintendo Co is gearing up for record software and Switch sales in the coming year, a much stronger performance than investors are projecting, its partners and suppliers said.
Kyoto-based Nintendo is planning for sales of its signature Switch game console to be flat or slightly higher in the fiscal year ending March next year, boosted by the introduction of a version with an OLED display, according to executives at allies including component suppliers, software publishers and retailers.
Analysts have forecast console sales would decline next year.
Photo: AFP
A series of marquee game releases is expected to drive software sales next fiscal year to 250 million units, far more than the record 205 million units forecast for the current year, according to the partners and suppliers, speaking anonymously as the plans are not public.
Analysts have also projected software sales would fall next year.
Some of the suppliers have been briefed while other partners established their own forecasts based on orders.
A Nintendo spokesman declined to comment.
The COVID-19 outbreak was at first a brake and then an accelerant for Nintendo, choking its supply and logistics before triggering a demand surge with global lockdowns driving people to seek entertainment and escape.
The firm’s Animal Crossing: New Horizons turned into the ideal virtual hangout for stress relief, juicing Switch sales and hastening the transition from packaged software to digital downloads.
“Nintendo will need to start the next fiscal year without Animal Crossing and the pandemic, but that will be offset by a much stronger blockbuster software lineup and new hardware,” Serkan Toto of game consultancy Kantan Games Inc said.
The Switch and Switch Lite continue to sell well, due in part to poor supply of Sony Corp’s PlayStation 5 and Microsoft Corp’s Xbox Series X released in November, David Gibson of Astris Advisory Japan said.
However, the lack of visibility around Nintendo’s upcoming games slate has prompted skepticism about the company sustaining its recent success.
“With or without an upgraded Switch, Nintendo’s hardware sales would probably decrease in the year from April,” Bloomberg Intelligence’s Matthew Kanterman said.
Nintendo’s ability to fulfill demand for the Switch will be challenged by the same global chip supply bottleneck that has troubled its rivals. Beyond securing chips from the likes of Taiwan Semiconductor Manufacturing Co (台積電), the firm also faces scarcity of more generic parts like display driver chips and Bluetooth modules, people familiar with its operations said.
Component suppliers said shortages would persist at least until June and the situation might not improve for the rest of the year.
Software developers are prioritizing the Switch for their upcoming game releases as the console is almost certain to surpass the 100 million units sold threshold, assuring a large audience of potential customers. Nintendo had sold 80 million Switch devices as of the end of last year.
Games announced for this year so far include several Pokemon titles and popular third-party games, such as Fall Guys by Mediatonic.
Though Nintendo’s release schedule for the second half of the year remains vacant, last month it delivered a positive surprise by announcing Splatoon 3 for next year, Gibson said, indicating a strong games pipeline for the long term.
“The Switch is in the middle of its life cycle,” Nintendo president Shuntaro Furukawa said last month.
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