Tha Nintendo Co. preparing for Switch’s recording and sales software in the coming year, a much stronger performance than investors plan, according to the company’s partners and suppliers.
Kyoto-based Nintendo expects sales of its Switch game console to be flat or slightly higher in the fiscal year ending March 2022, prompted by the introduction of a demo version OLED, according to officials at alliances including affiliate providers, software publishers and vendors. Analysts have predicted that console sales would decline next year.
A series of pavilion game releases are expected to drive software sales next fiscal year to 250 million units, far more than the record high of 205 million units for this year, according to participants and the providers, speaking anonymously as the plans are not public. Analysts also believe that software sales would fall next year.
Some providers were notified while other participants established their own order-based projections. A Nintendo spokesman declined to comment.
Nintendo shares rebounded early in the morning and ended up 1.6% in Tokyo on Monday.
The coronavirus revolution was first a brake and then an accelerator for Nintendo, choking its supply and logistics before it stimulated a rise in demand with global locks driving people to seek amusement and escape. The company’s Animal Cross: New Horizons turned into a truly attractive location for stress relief, reducing Switch sales and accelerating the transition from packaged software to digital downloads.
“Nintendo needs to start the next fiscal year without Animal Crossing and the pandemic, but that will be balanced by a much stronger software line and new hardware,” said Serkan Toto of game advisory group Kantan Games Inc.
Nintendo plans to release a revised version of the Switch in the latter half of this year with a bigger and better display as well as updated graphics when the hybrid console is introduced to a TV set, Bloomberg News reported. The company makes some of the largest blockchain games on its platform, which greatly increases profitability and also encourages hardware adoption. Many of the new games this year are still without warning.
The Switch and Switch Lite continue to sell well, due in part to poor supply of Sony Corp’s PlayStation 5. and Xbox Series X at Microsoft Corp. released in November, according to David Gibson of Astris Advisory Japan. But the lack of visibility around Nintendo’s upcoming gaming slate has sparked suspicions about the company sustaining its recent success.
“With or without an updated Switch, Nintendo’s hardware sales may decline in the year from April,” according to Bloomberg Intelligence’s Matthew Kanterman.
Nintendo’s ability to meet demand for the Switch will be challenged with the same global chip supply bottles that have overwhelmed its competitors. In addition to sourcing silicon from the likes of Taiwan Semiconductor Manufacturing Co., the Switch manufacturer is also facing a shortage of more common components such as integrated display driver circuits and Bluetooth modules, people familiar with the operations said aige. Component suppliers said there would be a shortage at least until June and the situation may not improve for the rest of the year.
Manufacturers of NAND flash memory – the media on which packaged Switch software is sold – are preparing more units for the coming fiscal year than they did in the current one, the people involved in the supply chain. Software developers are similarly prioritizing the Switch for their upcoming game releases as the console is almost certain to exceed the 100 million unit sales threshold, ensuring that a large audience of potential customers. Nintendo had sold 80 million Switch devices by the end of 2020.
Games announced for this year so far include several Pokémon titles and popular third-party games such as Fall Guys by Mediatonic. While Nintendo ‘s news schedule for the second half of the year is still blank, it was a good surprise to announce Splatoon 3 for 2022 last month, said Gibson at Astris Advisory, revealing a strong gaming pipeline for the long term.
“The Switch is in the middle of its lifecycle,” Nintendo President Shuntaro Furukawa said in February.