According to a Wall Street Journal report, gaming major Nintendo plans to make at least 25 million Nintendo Switch units between April 2018 and March 2019. It could go even higher than 30 million if 2017 holiday sales come in strong.
Why It Matters:
Initial production target was set at 8 million, then doubled to 16 million.
The new 25-30 million target is very ambitious because the only other table-top console that sold so much in a single year was the Wii, which recorded 25.94 million units in its second year.
Even the PS2, which is the all-time top seller, only did 22.52 million units in year three after release.
That represents a considerable amount of risk.
The Nuts and Bolts:
Based on holiday sales numbers in 2017, Nintendo may even look at producing more than 30 million Nintendo Switch units during Fiscal 2018.
The hybrid nature of the console is what Nintendo seems to be betting on. Its Nintendo DS range of portables sold 25.86 million units in year two, for a total of 154 million units to date.
The risk factor comes from the demand that Nintendo has projected.
If sales are not as strong as expected, the company may have to pare down its investment plan and revenue estimates.
Overestimating can cost millions, the way Snap Inc. recently experienced with its $40 million worth of unsold Spectacles.
