Nintendo Switch stock suffers delays in Japan due to the coronavirus

Nintendo announced that the production and deliveries of its hardware and software will be delayed in Japan as a result of the novel coronavirus outbreak (via CNBC).

The company said that the facts of the matter were “unavoidable” in an official statement. “We will continue to work to deliver products as soon as possible while paying close attention to the effects of the new coronavirus infection, and we look forward to your understanding,” summarised Nintendo. Because the Nintendo Switch and its Joy-Cons are manufactured in China, there will be delays due to the freightage restrictions and quarantines in the country. Ring Fit Adventure requires the Ring-Con accessory in order to play it properly, and it was a smash hit in Japan. As the Ring-Con is totally out of stock, the game’s sales have been stopped in their tracks. Nintendo is clear that these delays will only impact the domestic Japanese market.

However, industry analysts claim that the delays may reach beyond Japan owing to the reliance of countless companies upon Chinese assembly factories and construction lines. “China is important for manufacturing of some game hardware, phones and other components, and we believe that the entire supply chain of manufactured goods will be impacted—much more than just games,” said Niko Partners analyst, Daniel Ahmad. “When looking at games consoles specifically, we note that 96 per cent of video game consoles imported into the U.S. in 2018 were produced in China. Whilst companies such as Nintendo have moved some manufacturing abroad, China still accounts for the majority.”

Serkan Toto, CEO of consultancy Kantan Games, offered a different perspective. Toto recalled that there were significant supply shortages of the Switch in 2017, but this did not adversely affect the company’s fiscal performance. “So Nintendo already had a similar supply problem domestically that lasted for months, albeit for different reasons. It didn’t hurt demand later,” he explained. “I think you will see the same with the Switch, the ‘Animal Crossing’ special edition and ‘Ring Fit Adventure.’ People will buy these later.” In its statement, Nintendo did not suggest how the coronavirus could compromise sales. 

In early December 2019, the novel coronavirus outbreak began in a large seafood and live animal market in Wuhan, China. At the time of writing, there are over 28,000 confirmed cases of the novel coronavirus and over 500 deaths in the country. Organisations around the world are developing vaccines and testing antiviral medicine to treat ill individuals and stop the spread of the virus.