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Bloomberg: Nintendo Plans to Boost Switch Output to Meet Resilient Demand


NeoGAF: OMG Switch 2 is soon! None of us have phones!

Reality: Switch is still selling better than any of the newer consoles after 6 years and Nintendo will continue to produce as many Switch as people want to buy. The Switch will soon be knocking on the door of the PS2's throne room as the best selling console of all time.

Nintendo Co. plans to increase production of its six-year-old Switch console in the coming fiscal year after shipping roughly 21 million Switch consoles in the year ending March, according to people familiar with the matter.

The Kyoto-based company had lowered its sales forecast for the console to 19 million units in November because of component shortages, but is now convinced it can make more and demand remains strong, said the people, asking not to be named because the discussions aren’t public. The move to increase output is an unexpected measure at a late stage in the console’s lifecycle.

Nintendo has told suppliers and assembly partners it intends to churn out more Switch units in the fiscal year starting April, but has not yet communicated a precise target, the people said. It may revise down its plans later in the year if demand underwhelms.

Analyst expectations are for sales to diminish, however Nintendo’s plan suggests it sees sustained demand for at least another year. The console, whose price starts at $199.99, has been hampered more by supply issues than any demand slump, Nintendo executives have said.

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

A Nintendo spokesman declined to comment.


Switch console sales have historically been driven by the launch of marquee games, such as Animal Crossing: New Horizons during the pandemic, and Nintendo has several titles from blockbuster franchises like the Zelda series debuting in 2023.

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 near 150 million lifetime sales — a mark surpassed only by Sony Group Corp.’s PlayStation 2 among home consoles to date.

Semiconductor and component shortages have diminished across the electronics industry in recent months, with Sony executives expressing confidence that its PlayStation 5 console will be much more widely available in 2023 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, said Hideki Yasuda, an analyst at Toyo Securities. The company last year released a Splatoon 3 edition of its priciest 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.

— With assistance by Yuki Furukawa
 

bender

What time is it?
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Jennings

Member
Well, if they want to sell 20,000,000 Switches in 2023 then boosting production sounds like a good idea.
 

Deerock71

Member
Holy shit. 21 million units end of fiscal year. 7 years old. NO PRICE CUT (not counting the measly one for currency fluctuations). Why would they boost production? Might they be planning something sinister to undercut the PS5 and XSeries soon? Possibly to coincide with the release of Zelda: Tears of the Kingdom?
Jon Stewart Popcorn GIF
 
Holy shit. 21 million units end of fiscal year. 7 years old. NO PRICE CUT (not counting the measly one for currency fluctuations). Why would they boost production? Might they be planning something sinister to undercut the PS5 and XSeries soon? Possibly to coincide with the release of Zelda: Tears of the Kingdom?
Jon Stewart Popcorn GIF
I'm genuinely amazed that Nintendo has never needed to cut the base price of the Switch. It launched at $299. It's now 6 years later and it's...$299. Well, there's a $199 portable-only Lite version and a $349 OLED version now, but still. The base hardware costs the same today as the launch day.
 

TLZ

Banned
Of course they'll keep selling but til when? It's been on a decline curve already. They can't keep relying on it forever. And they cannot wait until it dies out. They need to keep momentum. Think of passing the baton. You don't wait til the runner fully stops.

Nintendo sees the decline and knows when to ship the next one. Besides, they'll still support the current Switch for a while as companies always do.
 

Kataploom

Gold Member
So 128M by end of this FY, am I getting it right?

If they ramp up the production that would mean they don't expect to sell less than 20M, that would leave the Switch selling 148M by end of next FY... There's no way they stop selling right there honestly so by around the holidays of 2024 they should be surpassing the PS2 if not before, assuming it starts declining there and sell 25% less that FY (163M consoles by end of FY 2024).

IDK if I'm getting this math right GAF, not used to it but to me make sense, no way switch stops selling this year or next year suddenly.
 
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I'm genuinely amazed that Nintendo has never needed to cut the base price of the Switch. It launched at $299. It's now 6 years later and it's...$299. Well, there's a $199 portable-only Lite version and a $349 OLED version now, but still. The base hardware costs the same today as the launch day.
Not to take anything away from the achievement, but it's effectively had at least a 20% price cut due to inflation.
 

Ronin_7

Member
They'll go head to head with a new PlayStation system in their 7th year.

Let that sink in 🤣

They'll lose this year WW but this shit is insanely impressive my God.
 

NeoIkaruGAF

Gold Member
Good job with your “it’s gonna beat PS2”, GAF. Nintendo listened and believed. Now we’ll have another full year of drought except for TOTK, while the little major third party support left dries up and the most exciting release is gonna be Super Alarm Clock Deluxe II. Oh, and maybe they can crank out another Fire Emblem or two, and another bugged Pokémon for good measure. It’s all they’ve been doing these last years.

I mean, milk the thing dry if it’s this profitable, but for the love of god have something ready at the gate the minute Switch sales look like they’re falling off that cliff.
 
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AV

We ain't outta here in ten minutes, we won't need no rocket to fly through space
We're still gonna get another few years of people claiming the Switch 2 is just round the corner. It's getting tiresome on this board. Had the same debate with dozens of people over and over for the last, say, 4 years.

"It's easy, Nintendo can just whip it together with parts off the shelf, it'll be via 4f60fps via DLSS, it'll have this and that chip. It would really damage their brand if they carry on the Switch 1 any longer, gamers want performance", yadda, yadda, yadda.

These people just do not understand Nintendo or their market.
 

Elios83

Member
I'd wait for Nintendo rather than believing a Mochizuki article.
Switch has peaked in 2020 with the pandemic boost and since then there has been a progressively declining demand.
Reversing that is unlikely unless major price cuts are planned, like 179$
 

Robb

Gold Member
Sounds crazy that they’d increase production this late in its life. An additional 20M should put them at >140M(?) by 2024. Crazy!
 
Yeah, a new Switch isn't coming any time soon. They have 0 incentive, and they have 0 incentive to ever release a powerful console again. The handheld game is where it's at.
 

Ozzie666

Member
Not sure how to read this really. On one hand maybe it's a sign Nintendo is going to try to maximize 2023 and the Switch, a last gasp effort. Which would potentially mean a 2024 release for a new system?
Or the Switch is still selling way to well and is too profitable to move on, or Nintendo themselves are scared and have no real succession plan, at least with any confidence.

I will say this, I know many people including our family who have purchases several switches. New models, replacements, whatever. I can't say the same with PS2. So I often wonder if the Switch is just continuously selling to the same people, over and over.
 

Tams

Member
I'm genuinely amazed that Nintendo has never needed to cut the base price of the Switch. It launched at $299. It's now 6 years later and it's...$299. Well, there's a $199 portable-only Lite version and a $349 OLED version now, but still. The base hardware costs the same today as the launch day.
Because it's at a sweet/Goldilocks price point.

It's not so cheap that it has to be poorly made and be perceived as cheap, but it's not so expensive as to make most people have second thoughts about buying one.

It's cheap enough for people to be okay with buying one just to be a Pokémon/Mario machine. And in that regard that it can play other games, including casual and fitness ones is almost a bonus.

Much more and people wouldn't want to buy one in addition to other computers, or a couple for some kids. You can kit out a whole family for gaming for around $1,000 (games not included).
 

Tams

Member
We're still gonna get another few years of people claiming the Switch 2 is just round the corner. It's getting tiresome on this board. Had the same debate with dozens of people over and over for the last, say, 4 years.

"It's easy, Nintendo can just whip it together with parts off the shelf, it'll be via 4f60fps via DLSS, it'll have this and that chip. It would really damage their brand if they carry on the Switch 1 any longer, gamers want performance", yadda, yadda, yadda.

These people just do not understand Nintendo or their market.
If you look at the Switch release thread, there are many members on here who have or should have eaten crow.
 
I will say this, I know many people including our family who have purchases several switches. New models, replacements, whatever. I can't say the same with PS2. So I often wonder if the Switch is just continuously selling to the same people, over and over.

The OG fat PS2 was considered to be the most unreliable console ever at the time.

Game sales is a better metric for your question:

Switch: By June 2022, 863 million software units (probably >1B by now) https://en.wikipedia.org/wiki/List_of_best-selling_Nintendo_Switch_video_games

PS2: As of March 31 2007, a total of 1.24 billion software https://en.wikipedia.org/wiki/List_of_best-selling_PlayStation_2_video_games

Bear in mind that the Switch software number for the most part doesn't include online sales. And Switch has at least 1 or 2 years of solid game sales remaining.
 

Chukhopops

Member
Shows how confident they are about the 2023 lineup, on which very little is known outside of Zelda.

Guess there’ll be a Direct around February to get the ball rolling.

It’s crazy to think I wasn’t convinced upgrading from normal Switch to OLED would be worth it when it launched. Definitely no regret today.
 

ADiTAR

ידע זה כוח
Shows how confident they are about the 2023 lineup, on which very little is known outside of Zelda.

Guess there’ll be a Direct around February to get the ball rolling.

It’s crazy to think I wasn’t convinced upgrading from normal Switch to OLED would be worth it when it launched. Definitely no regret today.
The mario movie is sure to boost sales as well.
 

RoboFu

One of the green rats
One would think launching a new console along side the Mario movie would be a huge marketing move, but I guess they feel strongly about the movie and Zelda being enough to light a fire. They could be right. 🤷‍♂️
 

Orta

Banned
Nintendo could easily and out of the blue pull a brand new or existing IP out of its arse whilst the Switch is on its last legs, create a frenzy and sell millions more systems off the back of it.

No reason for them to pull the plug yet, though I wish they'd bloody well at least hint at new hardware.
 

NeoIkaruGAF

Gold Member
Switch library is not "games I like, everything else is not a game".

There are plenty of third party games to play on Switch.
And in any case, there are plenty of backlogs to choose from, unless you play 52 games, 1 year, 2023
Don’t get me wrong. Switch has plenty of games, I was saying this when the system‘s library reached 1000 games and people were still saying it had nothing except Mario and Zelda.

But you can’t keep prospering when all you get is indies and JRPGs that anyone would hesitate to even call AA. The age of “impossible ports” is at an end. No big dev is going to bother with a Switch version in 2023 and beyond. I’m at a point where I wouldn’t buy something like Nier Automata on Switch even if it was 5€, because I have an Xbox too and the compromise for having the game on Switch is just too much. I mean, the Switch can’t even run the Klonoa remasters at 60fps. At this point it’s a Pokémon/Fire Emblem machine for Nintendo, and a damn expensive one at that. If Pokémon got some substantial backlash for its performance Nintendo would have rushed to announce a successor a while ago, but it keeps selling so it’s OK for them. They announced MP4 and that’s obviously not coming out on Switch, unless they seriously want to launch it with unacceptable performance or resolution or both.

The system may still get a dozen releases a week, but the actually significant releases are drying out fast and the smaller games are a bit too expensive at this point.
 

UltimaKilo

Gold Member
I'm genuinely amazed that Nintendo has never needed to cut the base price of the Switch. It launched at $299. It's now 6 years later and it's...$299. Well, there's a $199 portable-only Lite version and a $349 OLED version now, but still. The base hardware costs the same today as the launch day.
Maybe late next year they will need to do so. I do wonder if they will soon revise the console further with even more efficient, lighter components that can drive down manufacturing and shipping costs.
 

sandbood

Banned
Good job with your “it’s gonna beat PS2”, GAF. Nintendo listened and believed. Now we’ll have another full year of drought except for TOTK, while the little major third party support left dries up and the most exciting release is gonna be Super Alarm Clock Deluxe II. Oh, and maybe they can crank out another Fire Emblem or two, and another bugged Pokémon for good measure. It’s all they’ve been doing these last years.

I mean, milk the thing dry if it’s this profitable, but for the love of god have something ready at the gate the minute Switch sales look like they’re falling off that cliff.
Nintendo doesn't care about beating PS2 sales number. Take a look at the graph below, the only thing they care about is profits which PS2 is miniscule in comparison to Switch. Nintendo Switch is already the most profitable console of all time and Nintendo loves it.

IMG-20230121-105845-258.jpg
 
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