Sat, Jan 21, 2023 page5

• Nintendo plans to increase its Switch output

  SUSTAINED DEMAND: The company has told suppliers that it intends to increase production of the console, but it has yet to communicate price targets

  • Bloomberg
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  Nintendo Co plans to increase production of its six-year-old Switch in the next fiscal year after shipping about 21 million of the consoles in the year ending in March, people familiar with the matter said.

  The Kyoto-based company had lowered its sales forecast for the console to 19 million units in November last year because of component shortages, but is convinced it can make more and demand remains strong, the people said, asking not to be named because the discussions are not public.

  The move to increase output is an unexpected measure at a late stage in the console’s life cycle.

  

  A game demonstrator wipes down a game console at a Nintendo Switch exhibit in Boston on Feb. 27, 2020.

  Photo: AP

  Nintendo has told suppliers and assembly partners that it intends to churn out more Switch units in the fiscal year starting in April, but has not yet communicated a precise target, the people said.

  It might revise down its plans later in the year if demand underwhelms, they said.

  However, analyst expectations are for sales to diminish. Nintendo’s plan suggests it sees sustained demand for at least another year.

  With prices starting at US$199.99, the console has been hampered more by supply issues than any demand slump, Nintendo executives said.

  “Sales in the recent holiday season were not that strong even with improved supply,” UBS Securities Ltd analyst Kenji Fukuyama said.

  “People will soon start speculating about next-generation hardware and are likely to refrain from buying the old system. A slowdown in Switch sales momentum is unavoidable,” Fukuyama said.

  Switch console sales have historically been driven by the launch of marquee games, such as Animal Crossing: New Horizons during the COVID-19 pandemic, and Nintendo has several titles from blockbuster franchises such as The Legend of Zelda series that is to debut this year.

  Meeting Nintendo’s 19 million unit sales target for this fiscal year and going above that in the next one would bring the Switch into the rarefied territory of about 150 million lifetime sales — a mark surpassed only by Sony Group Corp’s PlayStation 2.

  Semiconductor and component shortages have diminished across the electronics industry in recent months, with Sony executives expressing confidence that its PlayStation 5 console would be much more widely available this year than previously.

  Nintendo can grow its Switch sales in the coming year, especially if it gives them a boost with game-themed special editions of the console, Tokyo Securities Co analyst Hideki Yasuda said.

  The company last year released a Splatoon 3 edition of its most expensive Switch OLED model, decorating the hardware with illustrations from the popular third-person shooter and helping drive 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.

  A Zelda-themed Switch would entice existing console owners to buy another unit, Yasuda said.
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