In an interview with Nikkei, Nintendo President Shuntaro Furukawa says that while semiconductor supply issues are expected to improve before the end of this fiscal year, next year looks more “uncertain”. This follows the release of Nintendo’s Q1 2022-2023 financial report.
In last week’s financial reports, Nintendo reported a 22.9% drop in profits for April-June 2022, but the company also assured people that it would not raise the price of the Switch and that the semiconductor shortage would improve over the summer and fall.
Furukawa says that Nintendo will “develop the best strategy” along the way and is doing its best to “purchase high-quality products at a reasonable price”, but everything is clear only until the end of the current financial year:
“Through cooperation with various business partners, we are on a path to improvement from the second half of this summer. But in terms of our sales forecast of 21 million units for the fiscal year to March 2023, we have a clear production outlook for this year alone. Besides, everything is unclear.”
This collaboration means that the Nintendo Switch supply should improve before the end of the year, as Nintendo already outlined in its latest financial report, but it is not known what supply and demand will be next year. Furukawa also states, “I can’t say exactly what’s missing,” but Nintendo will still sell all three Switch models – Standard, Lite, and OLED.
Although Furukawa reiterates that Nintendo is not considering a price increase “for the moment,” the president was asked about the increase in material and shipping costs.
“For the time being, our OLED model will continue to be less profitable than our other models. The shipping cost has undoubtedly increased not only by air, but also by sea. We think we can do.
The weak yen can be seen as an advantage for Nintendo since such a large proportion of our sales come from abroad, but our overseas advertising and staffing costs are also on the rise. To counter this, we are making more inventory purchases in foreign currencies.”
While the yen does weaken, costs around the world are also rising, forcing Nintendo to consider more options, including, as Furukawa states above, buying more inventory in other currencies.
And while a large percentage of sales come from overseas, Furukawa raises the issue of shipping costs, and the company needs to figure out a way around that.
OLEDs are more expensive to manufacture, and while more expensive than the standard model (and often the top-selling Switch console every week in Japan), it’s only marginally more expensive.
However, despite any potential supply, semiconductor, and pricing issues, Furukawa believes that “hit hardware” in the second half of the year will greatly help the console, especially referring to Splatoon 3 (September 9) and Pokémon Scarlet & Violet (November 18). . ).
Other big platform exclusives coming out for the rest of 2022 are Mario + Rabbids Sparks of Hope and Bayonetta 3, while The Legend of Zelda: Breath of the Wild 2 has a chance of being released before the end of the fiscal year (March 2023). as it is clearly dated in the spring of 2023.
What do you think of Shuntaro Furukawa’s words? Do you think the semiconductor shortage will improve next year? Let us know about it in the comments.