Nintendo plans to unveil a model of its Switch gaming console equipped with a bigger Samsung OLED display this year, hoping the larger touchscreen can prop up demand in time for the holidays, people familiar with the plan said.
Samsung Display will start mass production of 7-inch, 720p-resolution OLED panels as early as June with an initial monthly target of just under a million units, said the people, who asked not to be identified discussing internal matters. The displays are slated for shipment to assemblers around July, the people said. Representatives for Nintendo and Samsung Display declined to comment.
Nintendo seeks to sustain a Switch lineup that continues to sell well against the Xbox and PlayStation, thanks to pandemic-era breakout hits like Animal Crossing and a chip crunch that's plagued supply of rival devices. But the gadget is now into its fifth year, while Microsoft Corp. and Sony Corp. both have new and more powerful machines in the market.
The gaming community has speculated online about the introduction of an OLED or organic light-emitting diode screen, but Nintendo has stayed mum and President Shuntaro Furukawa said in February his company has no plans to announce a new Switch "anytime soon." Samsung's involvement is the strongest indication that Nintendo is serious about updating the console, and on a large scale.
Shares of the Kyoto-based games maker fell 3.6% in Tokyo on Thursday amid a wider market selloff.
"The release of a more premium version of Nintendo's Switch console with an OLED display and support for 4K graphics for the holiday 2021 selling season could drive the company's sales above consensus for the fiscal year ending March 2022 and extend the life cycle of the Switch platform for many more years," said Bloomberg analysts Matthew Kanterman and Nathan Naidu.
In February, Nintendo raised its annual forecasts after the Switch helped the company to its best quarterly earnings since 2008. The games maker hopes to sustain that run in 2021 despite stiffening competition and an ebbing pandemic.
"The OLED panel will consume less battery, offer higher contrast and possibly faster response time when compared to the Switch's current liquid-crystal display," said Yoshio Tamura, co-founder of display consultancy DSCC.
Nintendo decided to go with rigid OLED panels for the new model, the people said, a cheaper but less flexible alternative to the type commonly used for high-end smartphones. The latest model will also come with 4K ultra-high definition graphics when paired with TVs, they said. That could intensify a longstanding complaint of developers, who have struggled with the difference in resolution between handheld and TV modes and now face a bigger gap between the two.
The deal benefits Samsung Display because market prices for so-called rigid OLED panels have been falling due to excess supply. Winning a customer like Nintendo also helps the Korean giant - an affiliate of Samsung Electronics Co. - firm up production plans. Nintendo in turn secures a valuable partner and supplier at a time semiconductor shortages are squeezing the supply of display-related components.
The new display's resolution mirrors the current Switch and Switch Lite but is an upgrade from the Switch's 6.2-inch and Lite's 5.5-inch size. If the console's housing remains unchanged, the new Switch is likely to sport a thinner bezel.