After a rather lucrative 2020 in which sales of Switch hardware were undoubtedly impressive, seemingly only restricted by some supply issues, Nintendo has been seeking to maintain momentum. However, for the current financial year it set a target of 25.5 million hardware sales, down from 28.83 million sales from the 2020/2021 period. Some assumed this could be related to drops in demand for the system as it gets older, which is possibly partly the case, but it was also reportedly a result of the ongoing manufacturing and chip shortage issues in the industry.
In its most recent financial report Nintendo again acknowledged the challenges of supply constraints, alongside continuing issues related to the COVID pandemic. The company has consistently stated that its projections are contingent on being able to maintain its production targets.
In regard to business risk, the extended impact of both COVID-19 and the global semiconductor shortage creates a state of continued uncertainty, with the possibility of future impact on production and shipping. While these and other unforeseen risks exist, we continue to take all necessary measures in conducting business.
Nikkei is now reporting that earlier this year Nintendo was actually planning to ship 30 million Switch systems in this financial year. The publication suggests that Nintendo re-assessed the target in the Spring - presumably prior to issuing its financial projections - as a result of manufacturing and chip shortage issues, giving us the eventual 25.5 million figure. Nintendo has acknowledged to Nikkei that component shortages are an issue and "we are assessing their impact on our production".
The Nikkei report states that Nintendo may now only produce 'around 24 million' units in this financial year, which would be a cut from the current 25.5 million target. Nintendo's Q2 financial reports are due later this week, so they'll state clearly whether the company is revising its targets down.
The key point in this report is that potential declines in Switch sales are more likely caused by supply constraints; seemingly demand is still sufficient to shift even more units. This is reinforced by reports that Nintendo has struggled to meet demand for the Switch OLED model in Japan, in particular, with many retailers in the country having to resort to lottery systems due to limited stock.
It's also worth noting that Nintendo is far from alone in terms of manufacturing issues. It has arguably been affected less than its rivals in the gaming space, with both Sony and Microsoft having significant problems meeting demand for the PlayStation 5 and Xbox Series X (Series S is easier to acquire in some territories).
More will become clear later this week with Nintendo's financial reports.
[source asia.nikkei.com, via reddit.com]
Comments (29)
Glad I picked up the OLED on day one.
Same goes for about every electronics.
I’m sure some investors will panic but I’d rather news like this than product isn’t selling. Hopefully the share price won’t drop too much.
You have to wonder how much corporate spin is in that statement.
The chip shortage explains why I’ve not been getting as many with my pizza supper.
Nintendo in non-manufactured scarcity shocker
Not that I'm surprised at all about this. We were never out of the chip shortage to begin with.
Welp, at least scalpers can't take advantage of this due to how many Switches are out in the wild.
Yeap but even if there are shortages they still got the Switch Lite and base Switch to fall back on.
Tbh, we all saw it coming
That 24 million unit figure that Nikkei is citing is manufacturer production shipments, while Nintendo's FY2021 Switch hardware forecast of 25.5 million units is shipments to retailers.
This article is not confirming that Nintendo will lower their FY2021 Switch hardware forecast from 25.5 million to 24 million.
The question is, was Nintendo ever considering another secondary console brand? Does this stifle any notion of getting back into the two system game anytime soon?
Glad I was able to pre-order a Switch oled & PS5 day 1. Still can't find a Xbox Series X though 😒.
When have they NOT been in a shortage?
Fake news...again.
So glad I kept my retro consoles, and games. At this point I could care less about getting a PS5, or Xbox series X. My switch is fine for now. Thinking about getting a gaming PC instead.
Happy that i get my Deck in december.
I see that they’re having trouble in Japan with OLED model demand. is the same here in the US? EU? the day the OLED was announced for pre-order, I dashed to my nearest GameStop to reserve one because of a similar article I read back then saying if you wanted an OLED model that it was best to try and get the first batch as they would be difficult to find right after because of chip shortages. sooo glad I was able to pick one up day one!
4 more years!
4 more years!
Pretty unfortunate time for the chip shortage really. Compared to last years winter that just had Hyrule Warriors: AOC.
This year having the OLED launch, Metroid Dread, Mario Party, Pokemon BD/SP and then Pokemon Legends in January. I can see why they originally projected 30 million. That's the kind of line-up that could realistically have achieved it.
Well I can only speak for 3 states in the US. I live in Washington and the system is easily available in stores. People tried to scalp them on OfferUp from day one for $500 but they're now struggling to sell them at cost. The same is evident in areas of California and Louisiana though I'm less familiar with their scalping scene, it's easy to call around and find them in stock at WalMart, Best Buy and GameStop. Maybe this will change around Christmas but for now, I don't think the slump from an expected 30 million down to 24 million is purely shortage related. I think the demand for a nicer screen isn't as explosive as they were hoping.
@NinChocolate
I think Nintendo is in a good spot to go back to the two console model. Assuming they are trying to hit specs close to PS5 they could create a dedicated home console which will be supply constrained. Then 3 years later release Switch 2.
Or they can stay the course
@SpaceboyScreams
"Switch OLED actually isn't in high demand and the lack of supply is a lie."
> Source: Trust me, dude
@westman98 I only reported what I saw and what it lead me to suspect. Stay mad hon.
@SpaceboyScreams
Hmm, who should I trust here: Nikkei's factory manufacturing sources or SpaceboyScreams retail musings?
🤔🤔🤔 Lemme think, this is going to be hard.
@SpaceboyScreams I haven't seen consistent stock of Switch (the base colors and some of the Lite variations) in my area since September. Even August and before then was spotty, at best. That's only seven cities in one state, though, so I don't have a lot of data.
Edit: Haven't seen a single OLED in my area, either. Not one since launch day.
@westman98 You're so strange. I'm telling you what I saw. You don't have to trust what it makes me assume, you don't even have to trust what I saw, I'm just some dude talking on the internet and you've got so much pent up emotional investment in this for whatever reason that you chose to attack me over it. How weird is that? If you really think about it for just a minute, don't you think it's very weird?
@IronMan30 Okay now check OfferUp/craigslist and see what local scalpers are selling them for. Some places are completely bought out by scalpers and you'll see how successful they are if they're selling out at higher prices. If theirs are for sale for $380 then they bought out the stores but nobody cared so they're selling them at cost. The reason you can't find a PS5/XBone at cost anywhere is because since launch scalpers have been able to sell them at crazy prices because people really wanted them and still continue to.
@SpaceboyScreams I'm (in your words) just telling you what I see because they were available in every variety about a month ago, WHERE I LIVE, and now they're not. It's really not as cut and dried as you're making it sound about OLED or Switch in general. I'm not talking about PS5 or Series X so Idc about them. Although, funnily enough, I happened to see a few Series S' at Target a few days ago and would have bought one but lack of a disc drive deters me.
Anyway, Craiglist/Offerup in my area has OLED's going for $450 and up. OG used ones are going for $380 (taxes are not as high in my area as others but that's moot since I haven't seen any listings for new ones). So that must mean it's selling, amirite?
Tap here to load 29 comments
Leave A Comment
Hold on there, you need to login to post a comment...