Nintendo plans to make 25 million to 30 million Switch game consoles next fiscal year

[DonFerrari]

Miyamotoo said:

Hiku said:

Right. But there's a point at which overstocking moves from a safety buffer, to becoming excessive. This is an 80%-115% increase over their current estimated 14m this fiscal year, which is already a fairly large first year number to begin with. Also, if they've severely overestimated the demand in 2018, stock may not just sit around for months, but it could be much longer than that. And if that happens, the option to cut the price of the console will not be as viable (not without financial setbacks) because they've already mass produced units while its manufacturing cost is higher.

However, it's not like they're going to produce all of these units the first day of the fiscal year. This is obviously throughout the whole year. Which means that if Nintendo observe that they need to slow down production, they can take appropriate action.
But at the same time, I imagine they'll have to make some irreversible preparations in order to even be able to produce up towards 30m units next year.

Yes, but those 14m would be sold with huge stock issues. We still dont know strong second year for Switch will be.

 Exatly, 25-30m is plan to produce consoles for hole fiscal year, its not like they will produce them in one month and than they will just stand in some warehouse. If they see that Switch is selling great they incrase production acording to plan, if sales are not so great they can slow down production.

 

 

DonFerrari said:

Ok... so 5M consoles at 300 USD each is 1.5B in stock sitting for some months, if you think the finnacial cost of this is neglible ok you probably have a degree in administration and another in economy. Go and look at how much cost to keep 1.5B USD in stock for one quarter or more (and that is, considering end year on March, you are talking about selling not only what would be their target sales for Q1FY19 that for the previous year 25M sales would mean like 3-5M on the quarter for them to sell double or 3x on the same period for 5M excessive inventory to move... or do you think they will produce 30M, stock 5M and then shut down the factory for a quarter or 2?)

You aren't talking about ramping production to possible 30M, you are talking about having contracts to produce that and for "they could have excessive demand... if you are producing 30M a year, to keep 5M on stock for a next year explosion, than you would have to sell at least 35M to make it happen"

So you are expecting they to sell 14M this year, 25M 2018 and 35M in 2019? And for some reason that is hard logic...

we don't know how much they could have sold in 2018, but expecting 5M in stock when selling 25M, plus the usual channel consoles you are really talking only on wishfull thinking.

First, acording to article 25-30m is plan to produce consoles for hole fiscal year, its not like they will produce them in one month and than they will just stand in some warehouse, consoles will produce around 2-2.5m per month, If they see that Switch is selling great they continue production acording to plan, if sales are not so great they can slow down production. So its not like they will have in moment 5m consoles in stock, stock can raise evre month and if they see they have more consoles in stock they can just slower down production.

Again, there is possibility they will sell even hole 30m during fiscal year.

You missing point, its not point about what I expecting, but what are possibilities, and yes there is possibility they can sell 20-30m in 2018 FY.

There is nothing wishful about things I talk, I just bringing possibilities, again, there is possibility they can maybe sell whole 30m, there is possibility we will again have Switch parts shortages, or that they currently have great deal for Switch parts, those are clearly possibilitys not wishful thinking. Again, everything we have is assumptions or possibilitys, even this article is not a fact, and those my assumptions/possibilitys are logical, but from some reason you arguing like everything is set in stone.

I doesn't matter the article for this point. you are the one defending they would make 30M to sell 25M and stock 5M.

I have no issues with possibility of they selling 20 or even 30M in a year... the issue that you know tried to get out of because you know you are wrong. Your point was that they would produce 30M to ship 25M and keep 5M in their factory. Just accept that makes no sense and moves on.