Nintendo‘s newest console is sold out everywhere, making gamers sad, but investors happy.
The Switch has been a huge success for Nintendo. The company announced sales of 1.97 million units in its most recent earnings report, which brings the total count to 4.6 million worldwide, according to Atul Goyal, an analyst at Jefferies.
“Switch demand-supply mismatch appears to be greater than Wii era,” Goyal said in a recent note. “Nintendo[‘s] unique and new strategy to launch a new console in non-Holiday season — and that too with a staggered game pipeline — appears to be working very well.”
Investors worried about another flop like the company’s last console, the Wii U, need not fear. The company beat sales estimates for the Switch, despite a shortage. Goyal was expecting sales of 1.9 million units, 700,000 fewer than the numbers Nintendo reported.
The Switch is just getting started, according to Goyal. Nintendo estimates it will sell 10 million Switch units, but hasn’t updated its projections after the strong first quarter sales numbers which means eventual sales could be even higher.
Sales of Switch games was similarly strong. Nintendo sold 8.14 million games, which is an average of 1.75 games per total unit. Analysts were expecting between six to seven million games to be sold, according to Goyal. The number of games available for the Switch is still relatively low, but the company has several big releases, like Super Mario Odyssey, coming later this year.
Nintendo made 16.2 billion yen in operating profit in the first quarter, which was way above analysts’ estimates of 11 billion yen. The Switch contributed heavily to that operating profit. The console brought in 104 billion yen between hardware and software sales in the quarter, which represented 67% of total sales.
It looks like the biggest downside to Nintendo’s quarter is the lack of supply for the console. No waiting list and consistently sold out stores are making it difficult to buy a Switch even if you wanted one.
Jefferies reiterated their view of Nintendo as the top performer among video game companies and reiterated their buy rating. Jefferies raised their price target from 57,500 yen to 59,100 yen, an increase of 2.7%. Shares are currently trading at 35,770 yen. Over the past year, Nintendo has risen 46.12%.