Reports have recently come out that show Nintendo has been spending a considerable amount of money on the procurement of raw materials. The figures indicate that Nintendo has spent more during the 2022 fiscal year than the last big spike, which was during 2019 when it launched the Switch Lite and the slightly improved “red-box” Switch.
This jump in spending led some folks to believe that the company was hard at work getting its production lines going with the hotly-rumored “Switch Pro” system; an enhanced variant of the hybrid that has been talked about for several years, and yet still has yet to be confirmed. Nevertheless, Nintendo has stepped out to explain exactly what all of this extra spending is for—insurance, essentially.
With the ongoing issues that the entire technology industry has been faced with when it comes to the production and distribution of components, Nintendo has decided to do what any wise entity would do in times of crisis: stock up. Just as a family would stock up on food supplies before a natural disaster, Nintendo has opted to buy a large volume of raw materials in order to combat the aforementioned supply chain issues.
This strategy was explained by the company’s president, Shuntaro Furukawa, during the Q&A session of a recent Investor’s Briefing. One investor squarely asked why Nintendo has spent 110 billion yen between March 2021 and March 2022, which is what led to Mr. Furukawa giving the aforementioned explanation.
Though Nintendo is clearly doing its best to weather the storm of the supply chain issues, it can only do so much. A recent report from Nikkei indicates that Switch hardware sales in Japan were down considerably during the April-June selling period when compared to its performance during the same time in 2021. Sony’s PS5 was also mentioned to be suffering a similar problem; all of this is to be expected until the global shortage begins to truly rebound.
[Source: Go Nintendo]
