• Bloomberg

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Nintendo Co. is raising its target for Switch production to around 25 million units this fiscal year, people familiar with the matter said, as the COVID-19 pandemic keeps lifting demand and component shortages ease.

The Kyoto-based company, which in April hiked orders to 22 million units by March next year, is asking partners to tack on another few million, said the people, who didn’t want to be identified discussing internal goals. Assembly partners plan to work at maximum capacity through December. The new production target suggests Nintendo is likely to outperform its Switch sales forecast of 19 million units for the current fiscal year, which analysts have either deemed conservative or blamed on possible COVID-19 supply shocks.

Plans could still change by adjusting output in the January-March quarter if demand begins to taper in the coming months, but production partners expect to at least surpass the 22 million units they’d previously been instructed to assemble, the people said. A Nintendo spokesman declined to comment.

The company has been boosting Switch production since the start of this year, even before the hit game “Animal Crossing: New Horizons” became the breakout success of the novel coronavirus era. Its assembly partners, who also serve major smartphone makers, initially prioritized requests from more lucrative handset contracts, but now find themselves with more capacity as orders level off due to the economic downturn as well as the roiling U.S.-China conflict.

The Switch remains hard to find in major markets including the U.S. and Japan, and Nintendo President Shuntaro Furukawa told shareholders in June that output should soon normalize.

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