Nintendo on its Switch hardware sales forecast, production not caught up to demand
For the fiscal year ending March 2022, Nintendo anticipates that it will ship 25.50 million hardware units for Switch. The company was asked about this during the Q&A portion of its financial results call last week.
Nintendo president Shuntaro Furukawa explained:
“The financial forecast for the current fiscal year was created based on our results through the previous fiscal year (ended March 2021) and the sales projection for the current fiscal year, taking two main points into consideration. The first point is that during the previous fiscal year, Animal Crossing: New Horizons, released in March 2020, was a hit and greatly drove hardware sales, especially in the first half of the year. As a result, sales during the first half of the previous fiscal year were on a scale unprecedented in our company’s history, and we believe that we need to take this temporary effect into consideration. The second point is that hardware and software sales remained quite strong during the fourth quarter (January through March) of the previous fiscal year, and that even recently we are still maintaining a high level of sales. In March of this year, Nintendo Switch entered its fifth year since launch. However, we recognize that, unlike the fifth year in the life cycles of our previous game systems, Nintendo Switch currently has very high momentum. Taking these two points into consideration, we have set our hardware sales forecast for this fiscal year at 25.50 million units.”
Furukawa also commented on Switch production in his response, revealing that production still hasn’t caught up to demand. He added that “production plans are more uncertain than they were at the beginning of previous fiscal years.”
As for production, we achieved steady hardware production through the end of last calendar year, and as a result, in the previous fiscal year we set a record for our highest fourth-quarter sales volume. Meanwhile, demand for hardware continues to exceed our expectations even after the beginning of this calendar year, and production has currently not caught up to this high demand due to the tight supply and demand situation for semiconductor materials worldwide. Although we are currently striving to produce as many units as possible, the fact is that our production plans are more uncertain than they were at the beginning of previous fiscal years. Our full-year sales plan is based on the premise that we can secure the materials necessary for production, but if we are able to produce more units, we will work hard to meet the strong demand, and to be able to ship and sell those units.”