Nintendo, in a bid to meet to massive demand for the Nintendo Switch for its global launch, decided to use airplanes to ship units of the hybrid console.
Shipments made through air are much more expensive than shipments through sea, which is the traditional method used for products such as the Nintendo Switch.
Nintendo Shipped Switch Units By Air
A Nintendo spokesperson revealed the company's decision to ship Nintendo Switch units by plane in March, with the goal of meeting the demand for the hybrid console during its March 3 global launch.
Hideki Yasuda, an analyst for Ace Research Institute, pointed out that Nintendo lost a considerable amount of its revenue with the decision. Shipment through airplanes would have translated to an additional cost of ¥5,000 per Nintendo Switch unit. This is equivalent to $45, which is 15 percent of the $300 price tag of the hybrid console.
In fact, when taking into account a previous report that claims the cost to make a Nintendo Switch unit is $257, Nintendo actually booked a loss of $2 for each unit shipped by airplanes.
Nintendo did not reveal the markets that the company sent Nintendo Switch units to by air, though analysts believe that the shipments went to the United States and Europe.
After the global launch of the Nintendo Switch in March, Nintendo reverted to using sea freight shipments for the hybrid console, which is much cheaper and the preferred option for transporting products around the world. Such a method, however, takes much longer compared to shipping by air.
Nintendo Switch Demand Still High
Nintendo's decision to accept a loss per Nintendo Switch sold for the units shipped through airplanes has paid off. In the company's recently released earnings report for fiscal year 2016, Nintendo revealed that it has sold 2.74 million units of the hybrid console.
However, it should be noted that Nintendo may have sold even more units of the Nintendo Switch if it was able to keep up with the massive demand for the device. While shipping units through airplanes helped in meeting customer demand, Nintendo is still lagging behind in ensuring the availability of the Nintendo Switch in retail partners.
When a store receives a shipment of Nintendo Switch units, the stock will likely sell out very quickly, frustrating gamers who have been trying to get their hands on the device. This is partly due to customers in waiting lists and partly due to scalpers who will then try to sell the hybrid console for a quick profit through online marketplaces.
The high demand for the Nintendo Switch has led to unscrupulous activities regarding the hybrid console, so customers should be wary of being taken advantage of. Some people are selling the Nintendo Switch on platforms such as eBay and Amazon with prices that are even lower than the normal price tag of $300, which is a red flag that the listing is a scam. The Federal Trade Commission has also issued a warning against customers who may be tricked into buying a Nintendo Switch emulator, which is a device that does not exist.
