According to a new report by Bloomberg on 20 January 2023, Nintendo Co. is set to ramp up the production of its Switch console in the upcoming financial year, with a The Legend of Zelda-themed unit expected to release sometime this year. Despite the console being in the later stages of its lifecycle, the Kyoto-based company is reportedly convinced that it can produce more units and that demand remains strong, according to those connected with the source.
Nintendo had previously lowered its sales forecast for the Switch to 19 million units due to supply shortages but now believes it can exceed that number. This move to increase output starting Q2 2023 comes as a massive surprise, as many analysts predict sales for the Switch console will decrease in the coming year. In a statement, Kenji Fukuyama, an analyst at UBS Securities, had this to say:
Sales in the recent holiday season were not that strong even with improved supply. People will soon start speculating about next-generation hardware and are likely to refrain from buying the old system. A slowdown in Switch sales momentum is unavoidable.
This statement starkly contrasts Nintendo's plan, suggesting that it sees sustained demand going forward. Noteworthy, sales for the Switch (which starts at $199.99) have largely been driven by high-profile game launches, with the console reportedly being hindered 'more by supply issues than by a lack of demand.' In particular, this included global semiconductor chip and other component shortages that have plagued the electronics industry, driving up prices and creating massive supply bottlenecks.
According to Bloomberg, Nintendo has informed its suppliers and assembly partners about its intentions to ramp up Switch console production in April 2023 but has not yet communicated a precise target. That said, if the demand for the Switch unit does not meet expectations, Nintendo may need to revise its plans later in the year.
While this move by Nintendo may be a sign that the Switch is still in high demand, it is important to consider the competition from next-generation consoles like Sony's PlayStation 5 and Microsoft's Xbox Series X|S. These systems offer much more powerful hardware and advanced features such as ray tracing, 4K resolution, and faster loading times, which are a major threat to the Switch.
As technology advances, it's likely that gamers will become more interested in these advanced features and may be less inclined to invest in an older console. That said, it seems prudent for Nintendo to stay ahead of the competition in the gaming market.