Nvidia Sales Predictions Hint at Nintendo Switch Production

Nvidia Sales Predictions Hint at Nintendo Switch Production

Nvidia could benefit greatly if Nintendo decides to double Switch productions.

Nvidia is expected announce their quarterly earnings today, but financial analysts are already predicting a large profit increase for the chip manufacturer thanks in large part to an increase in Nintendo Switch production, which Nvidia provides the chips for.

Nintendo Switch graphics

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As demand for the Nintendo Switch continues to rise, so to has the prospects of Nvidia, who financial analysts peg will have a strong 2018 in terms of profits. One of the biggest reasons for the financial uptick is the market prediction that Nintendo will make more Switches, and with it, order more chips from Nvidia.

The prediction comes from RBC Capital Markets analyst Mitch Steves who believes that Nvidia could see a $300-$400 million boost in fiscal 2018 thanks to Nintendo increasing production of the Switch from 8 million units to 16 million units. Steves wrote in his prediction report citing the notable increase of Switch sales over Nintendo's previous console, the Wii U.

"We think the incremental 6-8M units could add $300-400M to the top line (3-4% growth to annual revenue on a $50 ASP)[.]"

While this news suggests Nvidia could benefit greatly from a Switch increase, it also suggests Nintendo's manufacture increase for its Switch consoles is a given in the financial analyst community considering how successful the console has been for the Japanese company.

The Nintendo Switch has dominated hardware sales, shipping 2.74 million units in its first month. The company expects to ship 10 million units for the fiscal 2018, and increase operating profits to $600 million, nearly double that of 2017's $258 million. Reports suggest that the Nintendo Switch is the most popular Nintendo console since the massively successful Wii, a prediction that means Nintendo's profits could grow for the first time in 10 years.

The Nintendo Switch operates on a custom Tegra processor with a custom GPU based on Nvidia's GeForce graphics cards. As players of the Switch can attest, the graphics on Nintendo's latest gaming console delivers some of the best-in-class mobile graphics, which probably helped the Switch as it became one of Nintendo's fastest selling consoles.

Nvidia for its part is one of the most popular chip manufacturers in the world, though has recently been diversifying its portfolio with inroads to emerging markets such as automobiles and AI. However, the Switch could also be considered a technological shift, fully realizing the gamer dream of a mobile/home console hybrid.

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Matt Kim

News Editor

Matt Kim is a former freelance writer who's covered video games and digital media. He likes video games as spectacle and is easily distracted by bright lights or clever bits of dialogue. He also once wrote about personal finance, but that's neither here nor there.

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