Nintendo Co. has asked its assembly partners to increase production of its Switch gaming console again, raising its goal to as much as 30 million units for this fiscal year, according to people familiar with its strategy.
The Japanese games maker has been struggling to keep up with Switch demand for most of this year, boosted by the runaway success of Animal Crossing: New Horizons and the coronavirus pandemic lifting gaming demand. It had raised production orders to 25 million units in early August, but that has proven insufficient and assemblers are now operating factories at 120%, the people said, asking to remain anonymous because the targets are private. Nintendo shares reversed losses Wednesday to gain as much as 2.3% after the report.
Switch production was stifled by coronavirus lockdowns in China early in the year, but those issues have since been ironed out and Nintendo’s supply chain is now fully operational. Yet the surge in demand that the company has seen off the back of Animal Crossing has been uncommon, with both the game and the console sustaining elevated sales momentum six months after the island-hopping title’s release.
The introduction of a more affordable Switch Lite variant in late 2019 helped broaden the machine’s potential audience and Nintendo is making preparations for an upgraded Switch model and a beefed-up games lineup for 2021, Bloomberg News has reported. Several outside game developers, speaking anonymously as the issue is private, said that Nintendo has asked them to make their games 4K-ready, suggesting a resolution upgrade is on its way.