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In the 2021/22 financial year, Nintendo spent more than double its previous highest Switch-era annual expenditure on raw materials and supplies, according to figures from shareholder disclosure documents.
While the company hosted its 82nd AGM of shareholders on 29th June (and will soon publish notes on the accompanying Q&A session), this information was included in a disclosure published on 3rd June and has been highlighted recently by fwd-bwd on Famiboards (and again on Resetera — thanks, Neoxon).
The vast increase is related to the company’s non-consolidated inventories and expenditure. Firstly, here are the figures from the financial year that ended on 31st March 2022:
As you can see, Nintendo spent a whopping 66,517 million yen on supplies and raw materials from 1st April 2021 to 31st March 2022.
Compare this to the same figures from the previous year’s shareholder disclosure document:
As you can see, in the preceding financial year the company spent only (ha, ‘only’) 9,533 million yen on materials.
The documents for previous years are freely available on Nintendo’s investor website, and fwd-bwd has handily compiled the figures into a single table:
As you can see, the 2019 and 2022 financial years saw large spikes in spending on raw manufacturing materials, although the figure in latest report is more than double that previous high.
This means that as of March this year Nintendo was presumably sitting on vast amounts of materials and supplies but hadn’t yet begun to manufacture whatever they are destined for. As has been noted, 2019 saw the release of both the Switch Lite and the internally-revised standard Switch (the one with the better battery life running on the ‘Mariko’ chip), which would account for the previous spike in that financial year. The elevated ‘Work in progress’ figures from FY 2021 are likely related to high production to meet demand following the complications brought on by COVID. 2022’s ‘Finished goods’ figures don’t show much of a spike after the previous years’ struggles, and ‘Work in progress’ expenditure is significantly lower in FY 2022, despite the huge increase in supplies spending.
Which means what exactly? Well, before we start speculating about shiny new SKUs and Switch 2s, it’s worth noting that inflation, rising costs, and supply issues have been major constraints over the past couple of years, so Nintendo’s expenditure in this area is bound to increase.
Still, those factors alone are unlikely to result in such a massive spike in spending. It’s entirely possible Nintendo is simply stockpiling standard Switch components while it’s able to, anticipating further rises in costs in the short-term and acquiring as much inventory as possible with its substantial cash reserves.
Alternatively, Nintendo could be acquiring materials for new hardware — another revision, the fabled ‘Switch Pro‘, or a totally new thing. As we say, pinches of salt are required (as always), but the fact remains that in March 2022 Nintendo had bought up a big ol’ pile of materials to build something that it will want you to spend a chunky of your hard-earned cash on.