Nintendo Switch Thread - Page 163

Many people were surprised to learn that Nintendo Co.’s new video game console is missing a common feature of rival systems: support for high-fidelity, 4K graphics. Perhaps most perplexed were the numerous developers who were working on 4K games using a software toolkit provided by Nintendo.

Employees at 11 game companies said their teams were in possession of Nintendo’s 4K development kit for the Switch. The companies span the globe, ranging from large publishers to small studios and include at least one that has never made a console game before, Zynga Inc., according to the employees, who asked not to be identified because they weren’t authorized to discuss their projects publicly.

The latest model of the best-selling Nintendo Switch is set to go on sale Oct. 8. It will sport a larger screen than the current versions, use OLED technology for better color and contrast and, at $350, cost more than its predecessors.

But a system capable of handling 4K games isn’t expected to be released until late next year at the earliest, people familiar with the plans said. That leaves Nintendo at a technical disadvantage to rivals, whose shares have soared this year while Nintendo’s have lost 20%. It also risks alienating developers who have spent months tailoring their games to take advantage of upgraded hardware capabilities.

Nintendo responded to a list of questions by saying Bloomberg’s reporting is “inaccurate” and declined to specify which parts of the information it was referring to.

Bloomberg began reporting on details of the product more than a year ago, including the bigger OLED display, the fall release and the higher price. It was also supposed to contain a faster chip from Nvidia Corp. that would enable 4K graphics when connected to a television, people familiar with the plan said in March. Nvidia declined to comment.

But the 4K capability didn’t come to pass. It’s unclear exactly when the design changed. The reason, according to a person familiar with Nintendo’s hardware planning, was component shortages, a far-reaching problem born out of the Covid-19 pandemic. After unveiling the Switch OLED, Nintendo said it had “no plans for launching any other model at this time.”

By the time Nintendo showed off the new console in July, the company had already handed out the 4K kits to outside developers and asked them to design software to support the higher resolution. A development kit, which is used to test unfinished games, is a standard instrument in the game-making process. The Nintendo Switch kit contains extra memory to accommodate debugging software and additional ports to facilitate a connection to a computer but otherwise has similar capabilities to the hardware that customers would have at home. The kit for the original Switch, like the consumer products, transmits video to a TV or monitor at 1080p resolution. The new one does 4K.

The lack of 4K in next month’s product is significant because it puts Nintendo’s system at a technical disadvantage. Microsoft Corp. and Sony Group Corp. have offered 4K-capable consoles for several years and released even more powerful hardware in 2020 that continues to see insatiable demand. The Nintendo Switch, which came out in 2017, is still selling well and early pre-orders for the Switch OLED in the U.S. and Japan suggest it will be another hit, though Microsoft’s Xbox Series X and Sony’s PlayStation 5 are only going to grow stronger as more games come out that take advantage of their increased power.

Developers declined to speculate on Nintendo’s plans for another console but said they expect to release their 4K Switch games during or after the second half of next year. Last month, Zynga said that Star Wars: Hunters, a game for the Switch and smartphones, will likely be delayed until 2022 after initially being planned for release this year. Although Bloomberg identified 11 companies using the 4K kits, the actual number is probably much higher.

Nintendo could still decide to not release a 4K Switch. The Kyoto, Japan-based company has quietly shelved numerous products over the years for strategic reasons or technical challenges. One noteworthy example is a sleep monitor called Quality of Life that the company unveiled in 2014 and never sold. For developers that expended considerable resources preparing for a 4K console, the lack of an upgrade would complicate plans and may add the burden of converting their projects to support lesser hardware.

Chip supply issues triggered by the pandemic present a unique obstacle. Shortages of some important electronic components are hurting production across many industries, with automakers estimated to lose more than $100 billion as a result. Nvidia is one of many semiconductor designers that have said they’re unable to fulfill all of the orders they’re getting. Even outside of the most powerful and advanced processors, electronics makers face an uphill struggle to secure inexpensive but essential chips, such as power and data converters.

In a recent interview with Bloomberg, Toshiba Corp. singled out demand from game console makers as an area where it’s struggling to catch up. One specific class of component, ABF substrates, is necessary for the 4K Nintendo product, but supplies of those parts are now fully booked until 2025, said executives at component suppliers to Nintendo who asked not to be identified.

Nintendo President Shuntaro Furukawa has said repeatedly in recent months that the company hasn’t been able to make as many Switch units as it would like. One supplier, who requested anonymity, said production is largely behind schedule to achieve Nintendo’s goal of selling 25.5 million units this fiscal year, which will end in March.

One of Nintendo’s assemblers said they’re confident they can accomplish Nintendo’s goal. But they warned that stock could be thin during the holiday shopping season, especially if the new OLED model turns out to be a hit.