As most of our readers no doubt already know, Nvidia supplies the chips for the Nintendo Switch, and with the new console selling as fast as they can make them, Nvidia is in a position to make some serious bank. Anytime a new system launches, it’s never a sure thing that it will be a success. Just look at the Wii U and its lifetime sales of 13.56 million to get an idea of how bad things can go.
But, so far the Switch is outpacing expectations, selling 2.74 million systems in under a month (750,000 more than Nintendo originally forecasted). Although Nintendo is expecting to sell an additional 10 million Switch systems from April 1, 2017 through March 31, 2018, many analysts believe it could soar even higher, assuming Nintendo can produce enough. All of this has a direct impact on Nvidia, who stands to make money on every system made. According to RBC Capital Markets analyst Mitch Steves:
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). This is a notable metric given that the Wii U sold ~13.5M units since its release in 2012 and 10M+ in the first 12 months are unlikely reflected in current estimates.
Of course this is great news for both Nintendo and Nvidia and if the success continues this could blossom into an even stronger partnership. Nintendo tends to revise its products and come out with new revisions, and you can bet that smaller, faster chips from Nvidia could play a pivotal role in the future.
[Source: Yahoo! Finance]