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Nintendo now believes Switch can reach Wii sales levels

"We have greatly increased the quantity we can produce in a single month," says Tatsumi Kimishima

In an investor Q&A following Nintendo's earnings announcement, which revealed a five times increase in profits, president Tatsumi Kimishima shed some further light on his company's intent to satisfy Switch demand and ultimately make a profit on the hardware.

Thanks to the rapid sales pace of the Switch, Nintendo has already reacted by greatly increasing the amount they can manufacture, Kimishima said. And in fact, "Planning to ship 10 million units means that we actually plan to produce more than that including units in our warehouse and in-transit product." Importantly, once Nintendo ships its 10 million units, profitability on each unit sold isn't far off. "Volume efficiencies will start to emerge once we produce the 10 million units we expect to ship this fiscal year, but we will not get the benefit of this right away," Kimishima explained.

With big titles like Arms, Splatoon 2 and, most important of all, Super Mario Odyssey coming this year, Kimishima believes demand will get even stronger. He said the production model takes that fact into account. Furthermore, given the portable nature of the Switch, Kimishima noted, "...we think there will be households that feel as though one is not really enough."

Continuing on that point, Kimishima said that's one factor for why Nintendo now believes that Switch could match the popularity of the Wii, which went on to generate an installed base of over 100 million.

"For us, being able to reach an installed base of more than 10 million units is fundamental to creating a strong business... [It] will give publishers and the rest of our business partners a sense that the future of Nintendo Switch is more promising," Kimishima said.

"The truth is we want to raise the installed base of Nintendo Switch up to the same level as Wii. As we mentioned during our presentation, Nintendo Switch in America had the fastest start of any Nintendo hardware, despite launching in March. In the video game business, it's important for consumers to feel that a sales momentum is going to grow, and we are setting a standard with Nintendo Switch to release a continuous string of major software titles from now on. And if our sales go according to our plan this fiscal year, we will be able to see Nintendo Switch gaining the momentum in which it can approach relative parity with Wii afterwards."

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Latest comments (5)

Richard Browne Partner & Head of Interactive, Many Rivers Productions2 months ago
Zero chance.
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.2 months ago
Keep the good marketing going.
Steady flow of games.
Reach both home console and portable console audiences.
Don't be afraid of price cuts.

Miss one of these and it's not happening.
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Richard Browne Partner & Head of Interactive, Many Rivers Productions2 months ago
The Wii hit 100m installed base because it sold to people who have never in their lives owned a games console, bought it, played it for five minutes and put it in a cupboard. I'm struggling to see how Switch breaks out beyond kids and old school Nintendo fans.
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.2 months ago
Richard, look at the marketing and the sales demographics so far. Switch is not riding on the typical Nintendo kid/retro gamer market.
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James Barnard Founder / Developer, Springloaded2 months ago
The console may have weak software for now, but it really is a wonderful thing to have as far as convenience goes. I can see myself getting a lot of indie and digital games on the switch over other formats. While it doesnt have any feature that will appeal to my mum, I can see this being an impulse buy for a large number of hardcore and midcore gamers once they experience how easy it is to take high quality games on the move. This really is what we thought the vita would be, let's just hope the quality of software stays high, and they keep things coming out regularly.
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