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Nintendo Co Ltd (OTC: NTDOF) (OTC: NTDOY) forecasts slightly higher flat Switch game console sales in FY22, boosted by the introduction of a version with an OLED display, Bloomberg reports.
What happened: Expectations are supported by successions of renowned game releases, leading to estimated software sales of 250 million units in FY22, a dramatic increase from the all-time high of 205 million units forecast for fiscal 21. However, analysts predicted lower sales of software and consoles in fiscal 22.
The pandemic stifled its supply and logistics before causing demand to surge with global lockdowns. Animal Crossing: New Horizons boosted Switch sales amid the pandemic and accelerated the transition from packaged software to digital downloads.
Why is this important: Nintendo intended to release a revised version of the Switch in the second half of 2021 with an improved display and improved graphics.
The Switch and Switch Lite continue to sell well, in part thanks to Sony Corp (NYSE: SNE) PlayStation 5 and Microsoft Corp (NASDAQ: MSFT) Xbox Series X supply crisis.
However, the lack of visibility into upcoming games from Nintendo and the bottleneck in the global supply of chips, including the scarcity of more generic parts, including display driver ICs and Bluetooth modules , act as potential headwinds.
NAND flash memory manufacturers would prepare more units for the coming fiscal year than the current one. Likewise, software developers are prioritizing the Switch for their next game releases as the console prepares to surpass the sales threshold of 100 million units. Nintendo sold 80 million Switch devices at the end of 2020.
Games announced for this year include several Pokémon titles and popular third-party games like Mediatonic’s Fall Guys. Interestingly, Nintendo announced Splatoon 3 for 2022 last month.
Price action: NTDOF shares are trading up 1.36% to $ 562.55 on the last check on Monday.
Image Courtesy: Wikimedia
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