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Media Create Sales: Week 28, 2017 (Jul 10 - Jul 16)

LordRaptor

Member
Can somebody explain what exactly the problem is with manufacturing these Switches?

The way I understand it is that there is a shortage of certain components (silicon?) and some of the most powerfull companies on this planet are fighting over it. Nintendo got apparently the short end of the stick and are stuck producing a limited amount of Switches.

But in this situation what can Nintendo actually do to improve their output? Wait it out? Go to another supplier? Apple isn't going to stop selling a shitload of iphones and ipads any time soon, so is this something that will be a problem through out the lifespan of the Switch?

Unless Apple are literally buying out all supplies as soon as they are made (which has happened before with the tiny HDDs the original G1 iPod used, but I don't think is the case here) eventually market equilibrium will be reached, either by increased component production to meet demand, increased component pricing to reduce demand, other suppliers entering the market, or some combination of the above.

Nintendo are being squeezed out because they might want to order, I dunno, 10 million chips a quarter at $10 each, but the phone companies are ordering 100 million a quarter at $5 each. The margins might be better with supplying the small order, but suppliers will still prefer to fulfill the higher bulk order first.
 
I don't believe we've actually seen demand fall out for a platform on shortages.

Individual games, yes, but that's because used copies exist, or another more appealing game comes out. There's not a sea of used Switches or exciting new hardware platforms releasing in the coming months.

Yeah, exactly. I mean, in terms of worldwide sales, the Xbox One X launches this year but...that's just in another category altogether as far as I'm concerned. The Switch fills a market that neither Sony nor MS are really competing in, so I don't see people saying "Well, I can't get a Switch yet, guess I'll just pick up a PS4 Pro instead." They fulfill such different needs that it would seem unreasonable.
 

cw_sasuke

If all DLC came tied to $13 figurines, I'd consider all DLC to be free
People were crying DOA before, during and after the January presentation, so it's a surprise to everything. I know Switch can sell more, but unless the shortage affects to achieve the number mentioned in their forecast (it was almost equal or more than Wii U LTD right?) I wouldn't consider Switch a failure.

The next fiscal year will be important, it wouldn't surprise me if the forecast for 2019 it's surpass Game Cube numbers and maybe reach to N64 level of success.

No one is calling the Switch a failure....but Nintendo could have had one of the strongest Year 1 performances ever if they just had been more confident in their content. They are releasing some of the best games of the year exclusive on their system, but fail to provide enough consoles.

Thats really one of the main issues with Nintendo....it seems like they are never really prepared for success or know how to handle it. We saw the same with the WiiU were they just werent a place to act like a market leader. There is always some kind of bottleneck when it comes to the performance. I believe in the plattform and im sure it will sell what its supposed to sell anyway once the shortages are worked out. But it can be frustrating....this is the NX, their future , the platform that was supposed to unite their handheld and homeconsole output/divisions...they do pretty much everything right but fail to consider that this might actually be a mayor success and that there are many gamers who skipped the WiiU and would wanna play those Nintendo IPs in HD.
 

Mory Dunz

Member
Since it's being touched on, what do you guys think of "lost sales"?


On one hand, I think there is a time limit on people's purchases. You have to capitalize on interest or else it fades

On the other hand, if someone can't find one now for Splatoon 2, are they just not going to care a year later if Pokemon and AC come out, in addition to Splatoon 2 still being available?
Maybe.
Part of me thinks the sale would happen eventually. If it's between Xbox and PS someone might just go with the other since the two competitors are fairly similar. Whereas Nintendo's lineup is mostly their own. You aren't going to get those experiences anywhere else at the moment.

But again back to the other side, a potential customer might just buy the other options even if it doesn't satisfy all their needs (i.e a Splatoon 2). After all, the best ability is availability. And getting a new console for Christmas may be more important than getting their first choice. Or a potential customer may just buy nothing at all, which is always an option


tldr
Eff, I don't know. I ended up rambling a bit back and forth.

edit:
seems like everyone already gave an opinion while I typed this up.
 

horuhe

Member
Wasnt ratukan suggesting 15k for the bundles? Its possible they got less than the avarage but I'd be surprised at more than 25k

But that number didn't include the preordered bundles but only those sold this week, unless I misunderstood horuhe, so that's not all either.

Yeah, exactly. Rakuten, according to its weekly rankings, is suggesting around 15k, but didn't count earlier pre-orders. They weren't big, though... So I guess no more than 5k could be added to that number. I remember that after the first day Splatoon 2 (and its bundle) went wild, it could never be reserved again. That's why around 50k makes a lot of sense, if the blog guy info is true.
 

Chris1964

Sales-Age Genius
Wasnt ratukan suggesting 15k for the bundles? Its possible they got less than the avarage but I'd be surprised at more than 25k
Numbers are less than 24 hours it must not be so difficult waiting for them than extrapolating from online retailers. With guesses I can find you a formula Switch topped 100k and still is in line with blog's leak.
 

Sage00

Once And Future Member
I don't believe we've actually seen demand fall out for a platform on shortages.

Individual games, yes, but that's because used copies exist, or another more appealing game comes out. There's not a sea of used Switches or exciting new hardware platforms releasing in the coming months.
Depends if you consider PS VR a platform. Definitely had the legs cut out from under it, probably never to return, despite the game release/support schedule not changing so much.
 

crinale

Member
Actually, I wanted a clarification on this, because crinale and hiska-kun's reports from the blog are a bit different





The first one sounds like what he noticed for his own shops / other shops, while the other seems a bit more general, thus a bit more like the usual leak that happens a few hours before it's officially released. So, I wanted to understand if it's the former or the latter. The former potentially already happened back when he posted that list of Switch pre-launch games ranked by initial shipment 's sell-through IIRC, that's why I'm asking.

When the guy "leaks" something I'd assume it's not only his shop (which I was expecting for a couple of years). The guy is in the position to get invites to DQ event or even MH reveal at E3, so I believe he is more like in managing position or corporate executive of retail channel. I've seen his blog updated like every 5 minutes responding to some twitter account during daytime so he sure isn't the shopkeeper I guess.
 

LordKano

Member
No one is calling the Switch a failure....but Nintendo could have had one of the strongest Year 1 performances ever if they just had been more confident in their content. They are releasing some of the best games of the year exclusive on their system, but fail to provide enough consoles.

What's the best decision : going cautious, knowing that even if you suffer from shortages you'll be able to catch the lost sales later on, and in case it end up being a failure you wouldn't have overshipped them, or going full blast at the risk of severely regret it if it doesn't take off ?

It's not like Switch is a safe product that was bound to sell well, hence the reaction in January, it's an unusual product and its success wasn't a certainty at all. It's easy to say now that they should have been prepared to have another Wii on their hands. If you argued that in late 2016 you would have been, rightfully so, laughed at.
 

horuhe

Member
Numbers are less than 24 hours it must not be so difficult waiting for them than extrapolating from online retailers. With guesses I can find you a formula Switch topped 100k and still is in line with blog's leak.

I'm sure everyone here, expected at least the double of the usual shipment, around 60k plus the bundles. But I think the blog info really turned things around.
 
What is NAND flash memory?
What is the margin of a highend smartphone?
What is the margin of a datacenter server?
What is the margin of a Nintendo Switch?
What is the 2017 market volume of the above 3?
In case of NAND scarcity, who is most likely to be able to absorb price hikes?
Where does Nintendo stand in NAND vendors supply priorities?
 

Ex-Psych

Member
Tomorrow we'll finally have an idea of what Nintendo expected the Switch to sell within four months before the need to ramp up production.

There's being conservative, but then there's being just straight up paranoia.

How much did Nintendo expected the Switch to sell initially? Sub 3 million? Was their confidence for the system to be a hit that low?
 

D.Lo

Member
What's the best decision : going cautious, knowing that even if you suffer from shortages you'll be able to catch the lost sales later on, and in case it end up being a failure you wouldn't have overshipped them, or going full blast at the risk of severely regret it if it doesn't take off ?

It's not like Switch is a safe product that was bound to sell well, hence the reaction in January, it's an unusual product and its success wasn't a certainty at all. It's easy to say now that they should have been prepared to have another Wii on their hands. If you argued that in late 2016 you would have been, rightfully so, laughed at.
Yep.

Honestly if I were them I would have delayed many of the games. Zelda and Mario Kart alone have driven the current sales. They could easily pushed Arms out a month, sat on Mario until 2018 and had Splatoon as the big holiday game. Bad for gamers, good for Nintendo, who can pull the trigger on the big games when they need them.

Right now they have the huge drivers with no stock left to drive.
 

Chris1964

Sales-Age Genius
I'm sure everyone here, expected at least the double of the usual shipment, around 60k plus the bundles. But I think the blog info really turned things around.
The split of shipments depends on how much Nintendo wants to push bundles. Saturday lotteries, at least those we know, had almost equal quantities between the SKUs.
 

LordKano

Member
Yep.

Honestly if I were them I would have delayed many of the games. Zelda and Mario Kart alone have driven the current sales. They could easily pushed Arms out a month, sat on Mario until 2018 and had Splatoon as the big holiday game. Bad for gamers, good for Nintendo, who can pull the trigger on the big games when they need them.

Right now they have the huge drivers with no stock left to drive.

They didn't want to delay anything to maximize 1st year sales and keep 3rd parties on board. Most of the releases are evergreen titles anyway, not a big deal if they don't break records at launch.
 

crinale

Member
I'm sure everyone here, expected at least the double of the usual shipment, around 60k plus the bundles. But I think the blog info really turned things around.

For the record the guy didn't say anything about bundle..
(I still doubt Nintendo could prepare that many bundle units though).
 

cw_sasuke

If all DLC came tied to $13 figurines, I'd consider all DLC to be free
Since it's being touched on, what do you guys think of "lost sales"?


On one hand, I think there is a time limit on people's purchases. You have to capitalize on interest or else it fades

On the other hand, if someone can't find one now for Splatoon 2, are they just not going to care a year later if Pokemon and AC come out, in addition to Splatoon 2 still being available?
Maybe.
Part of me thinks the sale would happen eventually. If it's between Xbox and PS someone might just go with the other since the two competitors are fairly similar. Whereas Nintendo's lineup is mostly their own. You aren't going to get those experiences anywhere else at the moment.

But again back to the other side, a potential customer might just buy the other options even if it doesn't satisfy all their needs (i.e a Splatoon 2). After all, the best ability is availability. And getting a new console for Christmas may be more important than getting their first choice. Or a potential customer may just buy nothing at all, which is always an option


tldr
Eff, I don't know. I ended up rambling a bit back and forth.

Lost sales matter that way that games that would really benefit from every additional Switch user like Fifa, Skyrim or NBA 2k might suffer from the low availability of consoles. The big first party games have ridiculous attach rates and will sell will no matter what...but for games that maybe only attract as small part of the installed base, increasing the the number of sold consoles asap is essential.

Bamco is supposed to drop a Tales of title on Switch this FY...games who dont necessarily care for Mario Kart or Splatoon might be interested to jump in because of Xenoblade, Tales of or Skyrim providing content that attracts a wider range of customers.

So yeah Nintendo wont directly suffer for it...but its just another step that makes the situation worse for 3rdPartys that signed on to be on board early.
What's the best decision : going cautious, knowing that even if you suffer from shortages you'll be able to catch the lost sales later on, and in case it end up being a failure you wouldn't have overshipped them, or going full blast at the risk of severely regret it if it doesn't take off ?

It's not like Switch is a safe product that was bound to sell well, hence the reaction in January, it's an unusual product and its success wasn't a certainty at all. It's easy to say now that they should have been prepared to have another Wii on their hands. If you argued that in late 2016 you would have been, rightfully so, laughed at.

lol...nah i was certain that the Switch would be a success after the unveiling trailer. Its a device getting all of Nintendos IPs that can be used on the big screen and on the go. Also as a customer its not my role to figure out how high the demand of the console would be - Nintendo has more information than we, they knew what kind of first party lineup they would have for Year 1. They are dropping 2 potential GotY, a IP like Splatoon in Japan, best of Mario Kart 8, new IP like ARMs etc.

Their has to be a middle way between these embarrassing shortages and producing too much - they just have to be more flexible they wanna be at a table with the big boys. They launch the system with 98 or 99 MC BotW, while announcing that Fire Emblem, Prime 4, Pokemon, Yoshi, Kirby whatever are all coming to Switch and are surprised that people wanna get their hands on the system ? Come on.
 
What's the best decision : going cautious, knowing that even if you suffer from shortages you'll be able to catch the lost sales later on, and in case it end up being a failure you wouldn't have overshipped them, or going full blast at the risk of severely regret it if it doesn't take off ?

There is a middle point between all out and this low though. They produced what, 2.75m units for launch with 0 ability for big restock. They could have doubled that number and still comfortably sold through it even if they had another WiiU on their hands. Why are they even producing hardware if they are this scared of another WiiU?

If the components weren't scare then fine. You can buy extra capacity and ramp up. But if securing the parts on your core product is this hard why would you low ball yourself this hard? Who knows when the component shortage is gonna end.
 

Vena

Member
I think Nirolak is from the future, we're a day removed from his point on VAing and we get a DQXI VA thread. Cheeky futurewalker, pretending to be a regular hooman!

Yep.

Honestly if I were them I would have delayed many of the games. Zelda and Mario Kart alone have driven the current sales. They could easily pushed Arms out a month, sat on Mario until 2018 and had Splatoon as the big holiday game. Bad for gamers, good for Nintendo, who can pull the trigger on the big games when they need them.

Right now they have the huge drivers with no stock left to drive.

These are all evergreens, good for gamers here is good for their word of mouth and public image in the face of the shortages.

They will still sell everything they ship for the foreseeable future.

We'll need to hear more from them in their investor meeting to see when/if/how much supply issues will alleviate.
 

LordKano

Member
lol...nah i was certain that the Switch would be a success after the unveiling trailer. Its a device getting all of Nintendos IPs that can be used on the big screen and on the go. Also as a customer its not my role to figure out how high the demand of the console would be - Nintendo has more information than we, they knew what kind of first party lineup they would have for Year 1. They are dropping 2 potential GotY, a IP like Splatoon in Japan, best of Mario Kart 8, new IP like ARMs etc.

Their has to be a middle way between these embarrassing shortages and producing too much - they just have to be more flexible they wanna be at a table with the big boys. They launch the system with 98 or 99 MC BotW, while announcing that Fire Emblem, Prime 4, Pokemon, Yoshi, Kirby whatever are all coming to Switch and are surprised that people wanna get their hands on the system ? Come on.

There is a middle point between all out and this low though. They produced what, 2.75m units for launch with 0 ability for big restock. They could have doubled that number and still comfortably sold through it even if they had another WiiU on their hands. Why are they even producing hardware if they are this scared of another WiiU?

You're saying that like it will sell 5M a year or so. If it continue at that pace, even with production issues, it will still easily sell 10 million units in its first 10 months, on par with most successful consoles. It's almost outselling the Wii U in less than a year. It's not that they were prepared for a Wii U situation, more that they didn't expect to have another Wii situation.
If the components weren't scare then fine. You can buy extra capacity and ramp up. But if securing the parts on your core product is this hard why would you low ball yourself this hard? Who knows when the component shortage is gonna end.

Once Apple will have ship its iPhone the shortage will tone down significantly I guess.
 
I don't think delaying anything would've been a good idea. Part of the reason there has been so much interest in the system is because of how consistent the lineup has been. There haven't really been any droughts and it doesn't look like there will be this year.

Delaying games would've caused several months without notable releases and it likely would've ended up like the Wii U's first year. Albeit the hardware itself is a much more attractive proposition than the Wii U was, but games are still so important to a system's success.
 

Mr Swine

Banned
Isn't this a problem that Nintendo will have for the rest of the Switch life if Apple hogs most of the supply chains. Or can they expand that through other supply chains or is it the same there with Apple hogging everything?
 

Nirolak

Mrgrgr
I think Nirolak is from the future, we're a day removed from his point on VAing and we get a DQXI VA thread. Cheeky futurewalker, pretending to be a regular hooman!

Boy I really wonder what's going on with Capcom's mobile games. They're supposed to release four flagship mobile games this fiscal year, and haven't even announced one yet.
 

jonno394

Member
Isn't this a problem that Nintendo will have for the rest of the Switch life if Apple hogs most of the supply chains. Or can they expand that through other supply chains or is it the same there with Apple hogging everything?

Potentially but the 10m shipped this year should definitely be set in stone.
 

Datschge

Member
I don't remember from who and whether it was ever indicated to be more than a rumor but I remember reading that the delay of Switch launch was already due to scarcity of parts and Nintendo wanting some specific amount of stock for the launch. If that's indeed the case Nintendo dropped the balls wrt the supply chain early last year already. For companies like Apple and Samsung supply chain management is something they plan for multiple generations in advance. With Switch easily being their most modern product at a given time yet Nintendo seems to be rather green to the whole supply chain thing.
 

Vena

Member
disappointed in no PR for splatoon WW

Their report is soon, I think they did similar before with Fire Emblem even though it had a strong opening, I could be misremembering. Basically saving the news for bombardment proceedings with their investors.

Nintendo : 'Supply will improve in July"

July is nearly over, seems about the same to me :/

Fall, not July. Also worldwide supply does seem to have improved. The NA retail seems to have stabilized over the crapshoot in May, and just received rather massive shipments before Splatoon's launch.

A 5k increase globally is a few hundred thousand more units per week.

Boy I really wonder what's going on with Capcom's mobile games. They're supposed to release four flagship mobile games this fiscal year, and haven't even announced one yet.

👀
 
You're saying that like it will sell 5M a year or so. If it continue at that pace, even with production issues, it will still easily sell 10 million units in its first 10 months, on par with most successful consoles. It's almost outselling the Wii U in less than a year. It's not that they were prepared for a Wii U situation, more that they didn't expect to have another Wii situation.

I think what we are saying is that production is based on several factors. In this case components and they should have planned better knowing the parr they require isn't stocked easily

Once Apple will have ship its iPhone the shortage will tone down significantly I guess.

Apple breaks phone records every year. This isn't going away until chip production goes up.
 
Tomorrow we'll finally have an idea of what Nintendo expected the Switch to sell within four months before the need to ramp up production.

There's being conservative, but then there's being just straight up paranoia.

How much did Nintendo expected the Switch to sell initially? Sub 3 million? Was their confidence for the system to be a hit that low?


It is kind of weird that the Switch seems like their hail Mary attempt to stay in the console business, and yet they haven't been treating it that way. If I were in the position where a 2nd failure in a row might mean going 3rd party depending on just how big of a failure it is, I would think I'd have a lot of things prepared ahead of time: media apps, virtual console, and a stockpile of consoles just in case the system is exceptionally successful, which it's been. It also seems weird to be in their position and then charge $70 for a pro controller, or $80 for two joycons. I'm not sensing the kind of hunger to stay in the console business that we got from Sega with the Dreamcast, for instance. In a lot of ways it feels like the Switch has been successful in spite of Nintendo.
 

jonno394

Member
Fall, not July. Also worldwide supply does seem to have improved. The NA retail seems to have stabilized over the crapshoot in May, and just received rather massive shipments before Splatoon's launch.

A 5k increase globally is a few hundred thousand more units per week.

My mistake, i had it in my head that they said July.
 

Mpl90

Two copies sold? That's not a bomb guys, stop trolling!!!
At this point, I don't think hype/demand will sustain.
If people couldn't get it for Splatoon 2, I think they're just gonna give up entirely.

Nintendo : 'Supply will improve in July"

July is nearly over, seems about the same to me :/

We'll have to seriously see if Splatoon 2 is the start of a period where the console gets bigger weekly shipments, at this point. Still, if we go by Media Create, we've witnessed numbers rising week-per-week, especially the past week: we've gone from 22,361 in week 25, 2017 to 31,906 right the last week - but of course, everyone here was hoping to finally see Switch back at 6 digits for Splatoon 2's launch.
 

LordKano

Member
Found the article I was looking for.
OJ-AU106A_NINTE_16U_20170112051805.jpg
https://www.wsj.com/amp/articles/nintendos-switch-game-console-to-debut-on-march-3-1484280797

Nintendo believed, with the production issues already in mind, that it could sell 10M units before 2018. I think people calculated the amount it should have sold until July and it was around 5M WW, so they're on track to easily reach it. Since it released in March, by its 1st anniversary, it may sold 11-12M units. That's extremely close to Wii and PS4 figures. Nintendo didn't expect another Wii U, they wouldn't even have greenlighted the product if that's what it would result. What they really didn't expect is to have one of their most successful console right out of the gate, capable of outpacing Wii. It's very different and doesn't show an initial lack of confidence, like some people are arguing for.

Sorry to bring non-japanese figures here but I wanted to clear that out.
 

Vena

Member
Apple breaks phone records every year. This isn't going away until chip production goes up.

In general, you stockpile before but near to launch by a few months proceeding, that allocation of resources (internal and external) will wane post-launch as you're largely met the initial surge in demand and subsequent demand will be much lower.

After that, there's months of R&D and prep work for the next model which frees up many production lines for other orders.
 

Xbro

Member
Found the article I was looking for.


Nintendo believed, with the production issues already in mind, that it could sell 10M units before 2018. I think people calculated the amount it should have sold until July and it was around 5M WW, so they're on track to easily reach it. Since it released in March, by its 1st anniversary, it may sold 11-12M units. That's extremely close to Wii and PS4 figures. Nintendo didn't expect another Wii U, they wouldn't even have greenlighted the product if that's what it would result. What they really didn't expect is to have one of their most successful console right out of the gate, capable of outpacing Wii. It's very different and doesn't show an initial lack of confidence, like some people are arguing for.

Sorry to bring non-japanese figures here but I wanted to clear that out.

Do you happen to have a link to where people calculated it out?
 

Ōkami

Member
From what we've heard there were 4 restocks this week, so if the regular systems sell on par with previous weeks then each restock must've been significantly lower than previous weeks.

From what I've read Friday was essentially just the bundles, while the weekend was mostly the standard consoles.
 
We'll need to hear more from them in their investor meeting to see when/if/how much supply issues will alleviate.

The investor meeting is this week right?
Wonder what kind of numbers it will give us and what kind of info.

I don't think we'll learn anything other than shipment numbers, since they don't do a meeting for Q1 results. Just the results, which likely won't have any information in the way of their strategy to deal with shortages.
 

Elandyll

Banned
I've said it before and I'll say it again. Nintendo does not create artificial shortages, they just have terrible supply chain management.
I guess it's a matter of perspective/ point of view no?

If Nintendo was willing to guarantee order # to their suppliers, they could open new chains of production.
As they are (apparently) unwilling to do so, they have to share existing lines with Apple who is about to ramp up demand with a bunch of new products coming.
 
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