“I think we must own up to the fact that our initial projections were too conservative.”
The Switch has been hugely successful, and it’s managed to sell almost 8 million units in six months, which is impressive performance by any stretch of the imagination. That said, the Switch has also been plagued by severe supply constraints and shortages of inventory at retail, which has often led to the question- how much better could the Switch have done if its availability wasn’t such a mess?
Nintendo’s President Tatsumi Kimishima has addressed the question of the Switch’s shortages during Nintendo’s finanacial meeting with investors. Addressing the question of shortages, he admitted that Nintendo was too conservative with its forecasts, and that supply should improve, and already is improving, going forward.
“Even though the Nintendo Switch launch was in March (and not during the holiday season), we had planned at the start of this fiscal year to ship 10 million units of hardware by the end of March 2018, based on our understanding of the high level of interest from so many consumers Six Months Financial Results Briefing for Fiscal Year Ending March 2018 Nintendo Co., Ltd. before the launch,” Kimishima said. “The 10 million target was a very high figure, and we simply didnʼt think such a high-volume sales target was easy to meet. However, weʼve continued to receive favorable consumer response after launch and inventories remained low, and I think we must own up to the fact that our initial projections were too conservative.
He then proceeded to explain that ramping up supply in and of itself has been a complex process.
“The Nintendo Switch system itself is made from a huge number of components, and weʼve made urgent requests to many of our contract manufacturer to ramp up production, with some of them even installing additional production lines. We released yesterdayʼs upwardly revised full-year hardware shipment target of 14 million units because we now project that we are capable of shipping that many units. This 14-million-unit shipping target for the full year means that we plan to ship roughly 10 million units just in the second half of this fiscal year, and production at this pace would manufacture even more than that. For instance, just splitting those 10 million units across six months translates to over 1.6 million units shipped per month going forward, with the production capacity being more than that. I think you can tell from recent Nintendo Switch sales trends that shipments are improving. I think we are ready and able to deliver Nintendo Switch to our many consumers around the world this holiday season.”
The question now is whether the increased supply will be enough- it is clear that the Switch is one of the most wanted items of the year, and it should be highly sought after this Holiday season. Will Nintendo have enough inventory on hand to be able to meet the demand? Or will there be stock shortages and supply constraints in spite of their best efforts? The Switch’s performance this Holiday season should be interesting to see.