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Forums - Nintendo Discussion - Why do you think supply for Switch was far lower than demand this holiday season?

 

Why was Switch supply so low this Holiday?

Nintendo underestimated demand 7 17.07%
 
Pandemic slowed down factory output 10 24.39%
 
Nintendo was unable to pr... 18 43.90%
 
Artificial Scarcity for increased demand 0 0%
 
Extend and Spread Out Dem... 2 4.88%
 
Other 4 9.76%
 
Total:41

I put other because it's a combination of the factors. 1, 2, and 3 all.

The pandemic resulted in increased demand AND reduced supply, AND Nintendo is prepping (or possibly already starting) production of the Pro SKU. All of these factors have resulted in decreased availability.



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I wanted to choose Nintendo underestimated and couldn't produce more due to limited factory output. If they could have contracted the manufacturer to produce 28M at the start of the year then they may have been able to boost that number up a bit if demand was still exceeding supply (by say 2-3 more millions throughout the year). But, iirc, Nintendo was forecasting 24M for their fiscal year. Which I would actually expect they have already hit or are close to hitting despite only just ending their third quarter. If so, Nintendo FY should end around 26-27M.



javi741 said:

Going into the holiday season, many people including me predicted that one of the reason Switch supply was so limited throughout 2020 was not only cause of the crazy demand, but Nintendo saving stock for the Holiday Season to maximize their holiday season sales and potentially have the greatest holiday quarter ever.

However, based off of sales data, sales of the Switch were pretty much exactly the same as the 2019 Holiday Season and in some cases slightly lower than 2019 despite the Switch has soaring to astronomical demand for most of 2020, with sales all year long nearly twice the amount as 2019. As Nintendo didn't at all have enough stock to meet demand.

Some people believe that the lack of a big Holiday Title like Pokemon or the lack of a new hardware release like the Switch Lite is the reason for lower Holiday Switch sales in 2020, but that is an objectively wrong assumption. The last thing to blame for slightly lower holiday sales is the demand. If Nintendo was able to meet demand I think Switch could've shipped 14M in Q3. All throughout the 2020 Holiday Quarter it was extremely hard to find a Switch for retail price as it was sold out everywhere and all the stock would sell out as soon as it came into stores. It wasn't like 2019 where you could just walk into any store and buy a Switch without needing to search store after store to find one. I work at walmart and asked the electronic section associate how fast Switch's get sold out, he states as soon as Walmart gets them they're sold out.

But what do you guys think is the primary reason why Nintendo didn't have enough stock for this holiday season? Was Nintendo limited in terms of factory output and was unwilling to use more factories to make more Switch's? Is covid-19 affecting the factories? Or is it a strategy by Nintendo to extend the demand of the Switch for longer to look better for investors who might be worried of the long-term future of the Switch. Maybe its to get more hype around the Switch since something sold out gets more demand, which isn't something atypical for Nintendo to d since they did it with Amiibos,NES and SNES Classis, and more.

No matter how many times this gets said, I think people put way too much belief in it.  I think there are far less sinister motives to some of the stock issues in Nintendo's history.  Take the amiibos for example, with so many characters in production, would it have been prudent for Nintendo to massively over produce something like the Wii Fit Trainer amiibo?  As for the Classics, they could have sold way more than Nintendo produced, but the limited supply had nothing to do with manufacturing artificial demand.  To Nintendo, the Classics were just intended to be a niche item from an intended limited production run from the get go.  Artificial scarcity only makes sense if you intend to manipulate it to sell more units that you wouldn't have previously been able to sell.  But, I think it's pretty clear that Nintendo could have sold way more than the entirety of what they ended up producing.  It's just not an item that they ever intended to have in production for a long term period of time.  If Nintendo is such a specialist at creating "artificial hype through designed scarcity", why didn't they attempt this with 2 of there worst performing consoles?  With the launch of both the Gamecube and the Wii U, Nintendo produced more units, not less, than previous launches.  In my opinion, this is just one of those myths that gets passed around the internet so much that people assume it must be true.

As for the Switch, I think they produced as many as they could for the year, and just came up short of being able to supply demand the same as every other console manufacturer this holiday.



brace yourselves for disappointment 



Mandalore76 said:

No matter how many times this gets said, I think people put way too much belief in it.  I think there are far less sinister motives to some of the stock issues in Nintendo's history.  Take the amiibos for example, with so many characters in production, would it have been prudent for Nintendo to massively over produce something like the Wii Fit Trainer amiibo?  As for the Classics, they could have sold way more than Nintendo produced, but the limited supply had nothing to do with manufacturing artificial demand.  To Nintendo, the Classics were just intended to be a niche item from an intended limited production run from the get go.  Artificial scarcity only makes sense if you intend to manipulate it to sell more units that you wouldn't have previously been able to sell.  But, I think it's pretty clear that Nintendo could have sold way more than the entirety of what they ended up producing.  It's just not an item that they ever intended to have in production for a long term period of time.  If Nintendo is such a specialist at creating "artificial hype through designed scarcity", why didn't they attempt this with 2 of there worst performing consoles?  With the launch of both the Gamecube and the Wii U, Nintendo produced more units, not less, than previous launches.  In my opinion, this is just one of those myths that gets passed around the internet so much that people assume it must be true.

As for the Switch, I think they produced as many as they could for the year, and just came up short of being able to supply demand the same as every other console manufacturer this holiday.

With regard to Amiibo's, it isn't even like they didn't produce a lot of amiibo's anyway. There was just a lot of demand. In one and a half years they managed to manufacture 32 million Amiibo's. How was Nintendo supposed to guess that the Amiibo's (who were designed to take functionality with the Wii U natively) would outsell the console almost 3:1 in less than two years? 

With regard to the NES Classic...the popularity of plug and play consoles was very minimal. Atari and Sega had tapped into the market with AtGames manufacturing the units to little mainstream success. Nintendo does it and it blows up selling more than the PS4 or Xbox One did in June 2018 in the US despite only being available for one day in that month and on a re-release from it's original launch in 2017 no less. The SNES Classic was even more successful than the NES Classic as well. Then we look at the competitors that tapped the market (including Sega's most recent Genesis, which is quality, and the PS1 classic)...and you simply don't see that level of hype or success. In Japan PS1 classic sold 1/3rd the amount that the SNES did in the same time and was heavily discounted to $60 then $40, then $20 in the States. Nintendo just created an incredibly successful product and nobody else has managed that same success in that plug and play market even after it's potential was shown. 



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During Christmas Week Switch outsold all other consoles combined 3 to 1 in Spain



Nintendo didnt underestimate demand, channels have been depleted pretty much all year, it's hard to make that up to the point where you have a 1-2 million surplus like years past.



Production couldn't meet demand all year long so it made it difficult to have a big surplus in Nov./Dec.



Signature goes here!

I think it's already been said, but... lower demand during the holidays?



Metallox said:

I think it's already been said, but... lower demand during the holidays?

It wasn't lower demand, the regular Switch was near impossible to get this holiday season since its been sold out everywhere