It is a known fact that demand for the Nintendo Switch has been outstripping supply since its launch in March. So to ensure fast restocking, the Japanese firm was compelled to use more expensive air shipping to ship Switch consoles during the first month of sales instead of using the more affordable sea freight option.
Sending Nintendo Switch via air could squeeze margins
A company spokesperson told The Wall Street Journal, “We carried some of the Switches by plane in March to serve our customers more promptly.”
The spokesperson, however, did not disclose the names of markets that were being served by air transport. Analysts believe the hybrid console was delivered to Europe and the United States by aircraft.
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Nintendo, however, switched back to shipping its consoles by sea in April, according to The WSJ. This sort of explains why the gaming company is still unable to meet the large demand for the Switch. Shortages of the hybrid console have been experienced in several markets since the Nintendo Switch went on sale in early March. Hence, shipping it via air would have drastically escalated costs for the Japanese firm.
According to Ace Research Institute analyst Hideki Yasuda, air transport is a big profit-squeezer because it could cost an extra 5,000 yen per unit or about $45, notes BGR. Use of aircraft for shipping products looks possible in the future, provided that interest in the hybrid console is still high, said the analyst. But the price of shipping via air is so much that it is no surprise that the company is back to shipping by sea now.
Nintendo needs to do a lot more shipping
Nintendo managed to ship over 2.74 million units by the end of March (even though it was expecting to sell only 2 million units during the period), and it is still unable to keep up with demands. The Nintendo Switch, its accessories and its games have been in high demand since the launch. GameStop and the “Sold Out” placement on almost all online listings is a proof of that.
Late last week, GameStop told Forbes that the Switch is not selling out in days, but in hours. It is now very possible that the popular hybrid console will outsell almost all consoles in every month, provided it is back in stock. Nintendo COO Reggie Fils-Aimé even claimed that the hybrid console is breaking records every passing day.
Nintendo certainly has a lot more console shipping to do in the foreseeable future, and it’s not just the console that is selling well as its accessories and games too are high in demand. Recently, the gaming company revealed that more than 459,000 copies of Mario Kart 8 Deluxe were sold on launch day in the U.S., making it the fastest-selling game in the franchise ever. The gaming company is expecting to ship another 10 million units of the Switch console during the current fiscal year, which runs through March 18, 2018.