Nintendo says that component prices won’t be an issue to continue producing Switch units
When Nintendo was trying to keep Switch on store shelves last year, one of the issues encountered was procuring parts for actually producing the system. The company provided insight into the situation during its 78th Annual General Meeting of Shareholders.
According to senior executive officer Hirokazu Shinshi, Nintendo receives cooperation from manufactures due to Switch’s momentum, “and because we shared with many of them our vision.” Shinshi anticipates that parts still won’t be easy to come by, but believes Nintendo will still be able to meet its forecasts.
Shinshi along with former Nintendo president Tatsumi Kimishima shared the following:
We are planning to sell 20 million Nintendo Switch hardware units during this fiscal year, and are not having any problems securing the production quantities to do so. As you said, component prices are volatile, but we are negotiating so that we can avoid this having a significant impact on the cost of producing these 20 million units.
It was a tough environment last year, and it was not easy to procure parts, such as memory and passive components, but I think that manufacturers were exceptionally willing to cooperate with us because of the momentum of our product, Nintendo Switch, and because we shared with many of them our vision. Not only last year, but from several years ago we have seen rather tough situations come and go with regards to memory, so we have spent a lot of time communicating with manufacturers, and continue to negotiate on factors such as prices and lead times. This year is turning out to be another tough one, and that may well continue into next year, so we will continue our conversations with them to make sure we are getting adequate supply at a price that is as close to what we are looking for as possible. As for production quantities during this fiscal year, I believe we can have the units ready to meet our forecasts.