COVID-19 Is Hurting Nintendo Switch Production
With Nintendo trying to increase production of Nintendo Switch units, they appear to be struggling to secure essential components for manufacturing. Switch units are selling out nearly everywhere these days and apparently Nintendo is struggling to secure printed circuit boards in Malaysia and passive components that attach to those boards in the Philippines due to quarantine policies. Although Nintendo has sought to increase their Switch production by 10% to keep up with demand, plant closures are preventing that from happening. The Nintendo Switch has been selling like toilet paper since Animal Crossing: New Horizons released exclusively for Nintendo’s hybrid console.
“The inventory may recover in the summer, but we may see shortages again toward the year-end because Nintendo wouldn’t be able to produce enough units for the shopping season,” said Hideki Yasuda, an analyst at Ace Research Institute. In a Nintendo investor Q&A following the publication of its latest financial results last Thursday, the company said it will increase its advertising budget during the mid-stage of the Switch life cycle in an effort to reach consumers who don’t currently play games. We can’t tell if this exceeded their expectations in selling so many units lately but we’re definitely around the middle of the Switch life cycle.
While Nintendo is discussing the shortage of essential Switch components, they’ve also warned investors of potential software and service delays due to disruptions also caused by the coronavirus. Several events are being cancelled worldwide in an effort to reduce the spread of COVID-19 but it’s clear that manufacturing is taking a hit as well. Many people are worried about next-gen consoles being delayed but Microsoft has already claimed that the Xbox Series X is releasing on schedule.
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Source: VGC