Your Switch May Have Cost Nintendo A Lot Of Money
By now, we have a pretty clear picture of how popular the Nintendo Switch was at launch, but today, we're getting a better idea of the lengths Nintendo had to go to in order to keep up with demand. As it turns out, Nintendo had to transport some launch consoles by air to regions like the US and Europe to keep store shelves stocked. Even then, consoles still sold out quickly, so imagine how bad the stock situation would have been if Nintendo had only relied on its traditional shipping methods.
Speaking to The Wall Street Journal, a Nintendo representative confirmed that it had to fall back on air shipments in March. The consoles were likely coming from China and are normally shipped by boat, and shipping consoles by air instead represents a pretty major increase in cost for Nintendo.
How much more? Analyst Hideki Yasuda from Ace Research Institute told WSJ that it could have cost Nintendo as much as $45 per console to ship them via air instead of by sea. With that in mind, one has to wonder if Nintendo made any profit at all from the consoles shipped by air. Margins on new hardware are typically pretty slim, and if Nintendo came close to $45 extra per console, that could have very well washed away any profit it would have made.
Of course, losing profit on a few consoles doesn't really matter in the grand scheme of things, especially when it comes to getting a brand new console into the hands of as many consumers as possible. Nintendo certainly has the cash in its coffers to take a hit on a few consoles, and if it helps make those launch sales numbers more impressive, then all the better.
While Nintendo probably won't resort to shipping by air again, Yasuda says it could happen as supply still outpaces demand. Indeed, GameStop recently said that sales haven't slowed much from launch, with consoles still selling out in a matter of hours instead of days. We'll see if that happens, but hopefully production is soon able to catch up with demand.
SOURCE: The Wall Street Journal