Display manufacturer and screen supplier, Japan Display Inc., was exclusively contracted by Nintendo to provide the Nintendo Switch with its 6.2-inch touch-screen. The company revealed in a discussion with the Wall Street Journal that they're manufacturing up to 3 million screens for the launch window of the Switch and they're expected to deliver screens to satisfy up to 10 million Nintendo Switch units throughout 2017.
The news comes amid Japan Display Inc., having a troublesome run lately on the market as iPhone sales dwindle and manufacturing screens has slowed down greatly for the company. According to the Wall Street Journal report they've had to settle on $664 million in aid due to the downturn in business.
They mention in the report that the 3 million screens set aside for the Nintendo Switch's launch will surely help business but the 10 million could very well put them back on top, especially with their new OLED displays that they're hoping to get contracted to manufacture for other VR manufacturers. This is all assuming that VR finally takes off and becomes a mass consumer product.
Japan Display Inc., is not working on VR display units for the Nintendo Switch, but they do note that the 10 million figure for 2017 is tentative and Nintendo will fluctuate that figure based on how well the launch for the Switch goes this March. They're also keeping their options open in case Nintendo does request VR displays, but for now the company is settling with touch-screen only screens from Japan Display Inc.
The parts supplier already managed to secure 30% of that 10 million for the launch, so anything more than that would depend on whether or not there's adequate hype for the Switch to see it sell-through all of spring and summer for a blockbuster fall.
Moreover, the 3 million figure doesn't necessarily dictate that 3 million Switch SKUs will be manufactured for launch, but that there will be 3 million screens made within the launch window. Some of these screen displays could be for replacements or set aside for future shipments throughout spring and summer.
Nintendo of America president Reggie Fils-Aime confirmed previously that there will be 2 million SKUs of the Nintendo Switch ready for launch. Additionally, GameStop has already sold out of its first shipment of Switch units via pre-orders alone, along with Amazon. GameStop's VP has mentioned that they're securing a second batch of units, but did not disclose how many exactly they're attempting to secure for the launch.
Depending on how things go will depend on whether or not Japan Display Inc., will fulfill that 10 million order. According to IHS Markit analyst Hiroshi Hayase, he explained to the Wall Street Journal that there's a lot of flexibility in the gaming market compared to the smartphone market, and this puts Japan Display Inc., in a favorable position...
“With displays for gaming devices, it’s very easy to adjust production, and that’s useful as a way to cushion volatility from less-flexible and more-competitive smartphone display making,”
There's a lot of chatter surrounding the Nintendo Switch at the moment but it's impossible to tell exactly how well the system will do at launch. Some expect it to the next Wii, a blockbuster seller from start to finish; others feel as if the Switch may end up like the Wii U, a huge expensive dud. We'll find out which one it becomes starting March 3rd.
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