Goodtwin
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I think the increase in production is actually suspicious.
Nintendo is running out of people to sell the Switch to. I would expect 20% decrease in hardware forecast, not a 10% increase. The whole industry is down this year. I don't think a console on its 7th year would sell 20+ millions, with or without a 3D Mario, with or without a price cut.
I think it would take a significant price-cut, a huge push in peripheric markets, a 3D Mario and a game that goes viral, such as Nintendogs, for Nintendo to sell that many Switches.
That increased forecast hides something else.
We have to be approaching that soon right? There are always new gamers entering the market, but that only accounts for maybe 25% of their year to year sales. Eventually every teenager and adult who wanted a Switch has already bought one. Yes the OLED may get some people to double dip and upgrade but I cant imagine the percentages are super high for that scenario. More likely than not, Switch sales will be down year over year. Software sales could remain strong thanks to good sales for titles like Zelda TotK and Pikmin 4, but even for games that those we may see sales lower than expected even though the userbase for Switch is massive. Eventually you start to lose some of those early Switch adopters who have moved on to newer devices. If there is a new 3D Mario game for the holiday season later 2023 along with a price cut, maybe Nintendo can move 20 million Switch units, but that would be very optimistic and the likelihood of sales dropping significantly in 2024 go way up since Nintendo will have burnt through some of their heaviest hitters in 2023.
Nintendo could very well be gearing up to stock pile Switch units so that they can transition those manufacturing partners to start creating their next hardware. There is a finite level of capacity for these manufactures. I believe this is part of the reason why Sony halted PS4 production pretty early on so they could have their manufacturing partners focused on PS5 units.