Nintendo has ordered a production increase of its Switch gaming console as global stocks fail to meet demand and disappointed fans scramble to secure machines through an informal online market in “Switch futures”, say people close to the company.
The planned production hike for the console is designed to meet demand ahead of the Thanksgiving and Christmas sales peak in late autumn, and has been ordered just weeks after Nintendo declared the $300-priced Switch to be its fastest-selling gaming device.
The success of the Switch, which was intended to bridge the gap between television-based and portable gaming, has boosted investor confidence in Nintendo. Shares in the company hit their highest level since 2008 on Friday giving it a stock market capitalisation of nearly ¥5tn ($45bn). That would make the creator of Super Mario and Donkey Kong more valuable than compatriots Nissan or Panasonic.
The pace of sales of Switch consoles, which tend to sell out within a few hours of arriving at retailers, has prompted some to compare the device with Nintendo’s Wii. That console was released in 2006 and went on to sell more than 100m units, partly because it won over families and children who were not hardcore gamers.
People involved in Nintendo’s hardware supply chain say the Kyoto-based games maker is now targeting Switch hardware production of 18m units for the 12 months ending March 2018.
According to people close to the company, the production increase reflects fears of “customer tantrums” as Nintendo prepares to release its flagship Mario Odyssey game in November.
The difficulty of obtaining a Switch in Japan has created a side market based on the way that some retailers offer free guaranteed bookings of product delivery on a specific date. People who have managed to secure those guarantees have found they can sell the consoles online to desperate gamers: the market price for a guaranteed Switch delivery in July, for example, has been pushed to about ¥14,000 ($126).
Other companies have benefited from Nintendo’s boom, too. Best Buy, the US retailer, saw its shares spike to an all-time high last week when it cited the Switch as a key reason it had beaten same-store sales expectations. Shares in Hosiden, one of Nintendo’s key component suppliers, have surged to a seven-year high, and on Friday, games publisher Capcom saw its stock jump to a six-month high after it tweeted that the next generation of its hit Monster Hunter series would be available on the Switch.
Also built into the rising share price is growing investor confidence that Nintendo intends to monetise its intellectual property via smartphone games — a market worth tens of billions of dollars a year but which the company shunned for many years. People close to Nintendo have confirmed that it is planning to release a mobile game based on its blockbuster Princess Zelda series.
Submitted May 28, 2017 at 06:47PM by vegaseller http://ift.tt/2sbxjTp
