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Electronics

Nintendo raises Switch output to record 30m on stay-at-home demand

Boom in paid subscriptions helps to drive gaming device's success

The Nintendo Switch is five years old. (Photo by Wataru Ito)

TOKYO -- Nintendo will ramp up output of the Switch to about 30 million units this fiscal year, Nikkei has learned, marking an all-time high for the flagship gaming device in a bid to capitalize on continuing stay-at-home demand.

The Kyoto-based company approached multiple parts suppliers about accelerating production. People with direct knowledge of the matter verified plans to expand output.

Nintendo is taking an unusual step for a device that is already in its fifth year of existence. The strategy will have to contend with a number of new rival offerings that have appeared in the last year.

Since debuting worldwide in 2017, the Switch has sold roughly 80 million units as of the end of 2020. Combined with this fiscal year's projected totals, sales of the device would reach 110 million units, eclipsing the numbers attained by the Wii console.

In addition, Nintendo will release a follow-up Switch model capable of better graphics. This will be the first such offering since the 2019 release of the Nintendo Switch Lite.

In the previous fiscal year through March 31, stay-at-home demand brought about by the pandemic fueled blockbuster sales of the social game "Animal Crossing: New Horizons" and the new "Monster Hunter" title.

Nintendo appears to have broken a new consolidated profit record in fiscal 2020. Such an earnings report would echo the results from fiscal 2007, when the company released its two hit devices the Wii and the DS.

Another driver of the Switch's robust performance is the Nintendo Switch Online paid subscription service. The platform allows people to pair with one another and game, and the number of subscribers has more than doubled in a year -- 26 million as of September last year.

However, a global chip shortage has put a squeeze on the digital device and automotive industries. Nintendo President Shuntaro Furukawa said in February the company has secured an adequate supply of components for the time being, but did not rule out future problems.

"We have experienced higher-than-expected demand this year as well, and there is a possibility that certain products will be in short supply, especially in Japan," said Furukawa.

Meanwhile, the Switch is competing with Sony group's PlayStation 5, which was released in November last year and is loaded with high-performance chips. The console is bundled with an online service that has over 47 million paid subscribers. Microsoft launched its Xbox Series X that same month.

The rise of mobile games and cloud gaming has also posed a challenge. Yet the Switch has been able to remain competitive in its fifth year on the market.

"The Switch can act as both a console and a handheld device, so it has lived to the fullest in stay-at-home environments," said Hideki Yasuda, senior analyst at Ace Research Institute.

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