The Nintendo Switch has officially been out for three weeks, and despite a rather large reshipment to most North American retailers, it continues to be sold out. For many people out there, it brings flashbacks to the Wii phenomenon, where the system was virtually out of stock for 2 years after its launch back in 2006.
It’s not too difficult to understand that getting production numbers exactly right is and impossible feat. Before launch Nintendo no doubt looked at a variety of factors to try and estimate how many Switches would sell in the launch month. Given customer interest and retailer buy-in, as well as taking into account production pipeline restraints and the fact that they were coming off the Wii U failure and launching outside of the typical November system release, they thought that 2 million systems sounded like a good start. After the wildly successful debut trailer in October last year, Nintendo upped production to 2.5 million for the launch month. It still hasn’t been enough.
Recently the Wall Street Journal reported that Nintendo is doubling Switch production for its next fiscal year from 8 million systems to 16 million. That would be for the April 2017 – March 2018 timeframe. Assuming this is true, spin-up of production does take time, so we wouldn’t be surprised to see continued shortages, especially in the near term. GameStop’s COO, Tony Bartel thinks it could be an issue all year long:
The demand is incredibly strong for this. As soon as we get it into our stores, it’s out within hours. So we anticipate we’re going to be chasing supply this entire year.
The other thing is, every game that’s out there, to have over a five and a half attach rate to this, signifies that a lot of people are finding this a great platform and they’re picking up any games that they can. I mean, we have almost a one-to-one attach of Zelda.
With Nintendo’s new strategy of releasing first party games steadily throughout the year, more and more games are going to entice potential buyers as the year rolls on. Right now Zelda is the killer app driving sales, but next month the Switch receives mainstream games like Mario Kart 8 Deluxe, Lego City Undercover, and Puyo Puyo Tetris. Then going into summer we’ve got ARMS, a brand new franchise from Nintendo that could be a huge success if marketed correctly, and then this summer is the potential megabit (especially in Japan), Splatoon 2. By the time fall arrives games like Elder Scrolls V: Skyrim, Fire Emblem Warriors, and Super Mario Odyssey will be upon us. If the stars align we should also get Xenoblade Chronicles 2 for Christmas. All in all, there should be plenty of new games to keep people playing and the system should be appealing enough to keep demand strong.
For those looking for a Switch, stay vigilant! Eventually the supply is going to catch demand and as long as you’re checking in with some retailers on a weekly basis and paying attention you should be able to secure one in the next few months. We will attempt to have news updates when we hear of them coming back in stock at retailers. Good luck!