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Nintendo may meet with Switch stock shortages to be sent to its western markets ahead of the launch of Animal Crossing: New Horizons (via Bloomberg).
This is due to the novel coronavirus. The outbreak began in early December, leading to 1,775 deaths and over 71,000 confirmed cases of the disease. 70,548 of these are recorded in mainland China, which is currently imposing travel restrictions, quarantines, and outdoor restrictions upon approximately 170 million people. The secondary effects of the epidemic have caused economic troubles for manufacturing companies, as their employees are unable to come into work. Nintendo had admitted that the widespread disease delayed the production and deliveries of its hardware and software in its domestic market, but now it seems that it will impact its western markets, too.
Anonymous sources told Bloomberg that deficient supply of Switch components from Chinese manufacturers is affecting output in a Vietnamese assembly partner. This factory is used to build Switches to be sent to the U.S., and the sources claimed that these shortages will hit units scheduled for arrival in April, once “existing inventory and current shipments of the console have sold through.” Bloomberg reports that the U.S. is Nintendo's biggest market, taking a 43 per cent slice of its core business. In comparison, Europe and Japan make up 27 per cent and 21 per cent, respectively.
Switches to be delivered in February and March will be on time, because these shipments are already on their way from Asia. But, ships leaving in February or March may not be getting a sufficient quota of Switch units, and one supplier said that supply and demand for the Switch was out of balance even before the coronavirus outbreak began.
“We do not see any major impact on the shipment to the U.S. currently, but we will remain vigilant and take steps if necessary,” said a representative for Nintendo. “It’s possible the supply would be affected by the virus if it becomes more widespread and prolonged.” The sources clarified that shipments would not cease entirely if components continue to be in short supply, but it is evident that the launch of Animal Crossing: New Horizons in March could be threatened. First-party games perform incredibly well for Nintendo, and, seeing that some consider the Switch to be over the hill, it’s important for the company to show investors it is able to sustain its success.
