Nintendo Prepares For Record Switch And Gaming Sales: Bloomberg

Nintendo Co Ltd NTDOF NTDOY is scheduling for flattish to slightly higher Switch game console sales during FY22, boosted by introducing a version with an OLED display, Bloomberg reports.

What Happened: The expectations are backed by marquee game releases’ successions leading to estimated software sales of 250 million units in FY22, radically up from a record 205 million units forecast for FY21. However, analysts have predicted a decline in both software and console sales in FY22.

The pandemic choked its supply and logistics before prompting a demand surge with global lockdowns. The company’s Animal Crossing: New Horizons drove Switch sales amidst the pandemic and accelerated the transition from packaged software to digital downloads.

Why It Matters: Nintendo intended to release a revised version of the Switch in the latter half of 2021 with an enhanced display and upgraded graphics.

The Switch and Switch Lite continue to sell well, partly aided by Sony Corp SNE PlayStation 5 and Microsoft Corp MSFT Xbox Series X’s supply crisis.

However, lack of visibility around Nintendo’s upcoming games and global chip supply bottleneck, including scarcity of more generic parts including display driver integrated circuits and Bluetooth modules, act as potential headwinds.

NAND flash memory makers are reportedly preparing more units for the coming fiscal year than the current one. Similarly, software developers prioritize the Switch for their upcoming game releases as the console sets to beat the 100-million-unit sales threshold. Nintendo sold 80 million Switch devices in 2020 end.

Games announced for this year include several Pokémon titles and popular third-party games like Fall Guys by Mediatonic. Interestingly Nintendo announced Splatoon 3 for 2022 last month.

Price action: NTDOF shares are trading higher by 1.36% at $562.55 on the last check Monday.

Image Courtesy: Wikimedia