TOKYO (BLOOMBERG, REUTERS) – Nintendo plans to produce around 24 million Switch consoles in the current fiscal year, about 20% less than originally planned, the Nikkei reported.
While demand for the new console is strong, the Kyoto-based company has struggled to get enough semiconductors to make the machines, the newspaper said. The company originally planned to manufacture around 30 million consoles, a record, he said.
The new Switch got off to a rocky start last month when it debuted, suggesting that supply constraints were hampering the company’s biggest product launch in years, Bloomberg News reported.
The US $ 350 (S $ 472) Oled Edition sold 138,409 units in the domestic market during its launch weekend, sales tracker Famitsu said, compared to the inaugural sales of the inaugural weekend of the original Switch of 330,637 in 2017.
A company spokesperson confirmed that the chip shortage was affecting production. He declined to comment on the reported figure of 24 million and said the company is now assessing the extent of the impact.
But on Thursday (November 4), Nintendo cut its full-year Switch sales forecast by 6% to 24 million units and said it would struggle to keep up with demand during key season. year-end purchases, as chip shortages disrupt production of the successful device, which is in its fifth year on the market.
“We cannot produce enough to meet the demand we expect during the next holiday season,” Nintendo President Shuntaro Furukawa said at a press conference.
“Currently there are no signs of improvement and the situation continues to be serious so I cannot say how long this will continue,” Furukawa said.
Nintendo said on Friday that the global chip shortage is also affecting hardware development.
“The semiconductor situation has some effect on hardware development,” Nintendo director Ko Shiota, who heads the development team, said at an analyst briefing.
“We are looking to replace components and refine designs to try to reduce the impact,” he added.
The company relies heavily on its console business at a time when deep-pocketed competitors such as Microsoft are expanding subscription and cloud gaming services.
Sales of the Switch device fell to 8.28 million units in the six months ending September, from 12.53 million in the same period a year earlier.
Nintendo said in May that it was targeting sales of 25.5 million consoles in the year ending March 2022, having sold 28.8 million units in the previous period. Management had hoped to exceed that figure, Bloomberg News reported at the time.
The new model sports a more dynamic 7-inch Oled screen as well as a new flexible stand, more storage space and better speakers as well as an internet cable port.
Nintendo’s flagship store in Tokyo’s Shibuya district has set up a lottery to determine who can buy the device.
Nintendo shares have fallen 24% this year amid concerns over the new Switch.
He declined to comment on next-gen hardware plans on Friday, but referred to an “upcoming integrated hardware-software gaming system” on the company’s slides.