2 days ago
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Nintendo's Switch 2 sets sales record in boon for games sector
NINTENDO Co. sold 3.5 million-plus units of the Switch 2 in just four days, a record-breaking start for the company's first new console in eight years.
The numbers, released by the company Wednesday, bode well for its target to sell 15 million units by March next year. They also reinforce analysts' projections that Nintendo may be able to sell far more if it can pump up supply.
Gamers from Tokyo to San Francisco lined up for hours last week to get their hands on one of the most highly anticipated gadgets of the year. The long-awaited Switch 2 succeeds a global hit in the original Switch, which pioneered a hybrid design that allows play both at home on a TV and on the move.
The release of the new Switch was regarded as a watershed moment for the industry, steering business decisions by partners and competitors for years to come. At a time of thinning margins and exploding development budgets, a popular new console may galvanize the sector and provide a counterbalance to the increasing dominance of a handful of marquee, live-service games.
Catching up with runaway demand is the first major challenge Nintendo faces.
President Shuntaro Furukawa has apologized after customers came away from lotteries for the Switch 2 empty-handed. The Kyoto-based company has asked its partners to speed up production of the console. It's also secured agreements from Japanese online marketplace operators such as Rakuten Group Inc., Mercari Inc. and LY Corp. to discourage resellers from taking advantage of the hardware's scarcity.
The console is manufactured mainly in China by partners including Foxconn Technology Group. Nintendo's shares, which have gyrated because of concerns about how tariffs may disrupt supply, were down more than 3% in Tokyo.
'The pace is good,' said Hideki Yasuda, an analyst with Toyo Securities. 'The key will be to maintain assembly capacity and increase production going forward.'
A chronic shortage may spur consumers to turn elsewhere and flatten momentum.
Nintendo's priority is to sustain launch momentum for as long as possible, Furukawa told analysts at an earnings briefing in May. That's more difficult due to the Switch 2's higher retail price compared with its predecessor and growing weakness in the global economy.
Furukawa has also warned the company may consider raising the console's price in the future, depending on US President Donald Trump's tariff measures. –BLOOMBERG
