Nintendo president Reggie Fils-Aime has spoken to Mashable about a variety of things Nintendo related, but inevitably talk came round to Nintendo Switch stock. Reggie says that the company actually over delivered on manufacturing Nintendo Switch units, but it just a case of demand for the system outpacing supply.
“As we look at the overall business, we’re constantly looking to do the right thing for the consumer,” Fils-Aime said. He brought up the Switch, Nintendo’s newest console, as an example. The company made 2 million units available at launch, despite, Fils-Aime said, analyst recommendations that demand would be much lower.
“We actually sold through almost 2.8 million units, so we dramatically over delivered. And yet, demand outpaces supply,” he said. “So what do some of the consumers on Reddit say? ‘Gosh, Nintendo, if you would’ve made more you would’ve sold more.’ Well, we did make more! And certainly we’re on a pace to supply in the current fiscal year 10 million units.”
In the end, Fils-Aime believes Nintendo is delivering on all the expectations fans have, albeit not at the rate in which they might prefer it to happen.
“I think if you were to go back and look at some of these comments, you would actually see that the issues have been resolved, but it’s happening at a pace that is later than maybe where the commenters would like the resolution to be,” he said.
“But it happens. And the solution is there.”
People seem to forget how many were saying “the Switch is going to flop”, creating a environment where demand would seem low.
Close to or right after launch almost every single one of these people flipped and started wanting the console, and as soon as they couldn’t get it, they complained about stock…
The notion that Nintendo would want to keep the system under-stocked is laughable, as there would be no benefit to such a thing.
This is very true, we are way past the point where Wii U sales started slowing down .
Granted, Wii U sales slowed down near immediately after launch.
The benefit is more money. People have been selling this way for decades. Understock popular items. Retailers up the price. Split extra profit with company. Who cares if people can’t get your product because of too high price or too little inventory? Money, money money. Now, now, now.
The minority of the market are not gamers who look for a specific console. The overwhelming majority of the market are the masses of families that have parents that are looking for a good past time entertainment for their children; these consumers don’t plan scan out their purchase by following news and preordering.
If they go into a store asking for a product which has a several month wait to potentially get the product, this consumer will very likely turn to another product.
So risking loosing a big percentage of consumers that add to the install base (which is more important) over getting some extra hype mixed with complaints about stock, is not a sound argument.
They want to sell as many consoles as possible, because the real income sourses are the games. And even if the games are the stupendously great, they will not sell if they do not sell the consoles first.
Which retailers have been upping their price, and how do you know they’re splitting those extra profits with Nintendo? The closest to what you’re talking about I’ve seen have been Gamestop forcing bundles on people, and scalpers. With the former, they’ve been doing this for a long time, at least as far back as GameCube/PS2/XBox. As for the scalpers, I’ve heard no reports on how they’re working with Nintendo, nor do I see why they’d have to when they can just do this whole thing themselves and rake in the full profits of their inflated prices.
Some products only become popular because of the lack of stock. The more rare a product is starting off, the more people that will want it as a lot of people want what they can’t get. Nintendo did this tactic with the Wii after the Gamecube didn’t do as well as they were hoping. Every company has done this tactic at times when they weren’t sure if a product would sell. Just because it’s possible that isn’t the case with Switch doesn’t mean Nintendo hasn’t done something similar in the past. *shrug* Whatever, though. If you want to believe Nintendo is this saint of gaming, that’s your problem.
Nintendo overstocked the Wii U and ended up losing a lot of money because of it!
They just played it too safe this time!
I agree with you.
Also I love your videos.
If demand is outpacing supply, then by definition, you have under delivered, possibly… dramatically! Let’s see: amiibo, GameCube controller adapter for Wii U, NES Classic Mini, SNES Classic Mini, Nintendo Switch… it’s almost like Nintendo doesn’t know how to do market research and anticipate product demand. But it’s ok, they are “dramatically over delivering” after all…
Nintendo over delivered for Nintendo. Under delivered by every other definition.
As a fan, I’m always hoping Nintendo sells gangbusters. From a business standpoint, though, there was a little concern that the Switch might flop. I understand that they aren’t going to be able to crank out more than 10-12 million units total by March, it’s just the reality of production when you’re planning on lower numbers.
They’ll be ready for 16-20 million units in the year of 2018 — if the demand is there for that many remains to be seen, but I have little doubt at this point that they will be able to achieve 25 million units sold-through by March 2019. Possibly 30 million.
http://www.dailymotion.com/video/x5hbnan&autoplay=1 hmm
Again?
Wii U-Overstocked-Sold poorly
Switch-Understocked-Sold well (so far)
Nintendo’s logic: We have to do low units because we don’t know if people will buy the Switch.
People: I WANT 10 OF IT!
And that’s how Nintendo win.
Rare products always make a killing when their stock suddenly rises. Apple is doing Nintendo a favor by giving them some competition in buying the parts that Nintendo needs for the Switch. Unlike the Wii, Nintendo doesn’t have to create false low stock this time around to sell their gaming system since they have actual direct competition for the parts that they need. In a lot of ways, Nintendo should be thanking Apple.