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Switch epilog

While Nintendo faces supply chain issues, the company promises to rectify the issues

Posted: By Jon Peddie 04.21.20

According to a report in Bloomberg and other sources we asked directly, Nintendo has sent out word to its supply chain to get it more parts so the company can build more Switches. However, memory suppliers may not be able to fill the bill.

Kyoto-based Nintendo has asked suppliers to meet a revised forecast for 22 million units in the fiscal year ending March 2021, up from the original forecast of 20 million units, according to sources. And another report from Nikkei first reported on Monday that Nintendo was eyeing a 10% increase in current-year Switch production. A company representative said it’s considering raising production but that parts supply remains constrained. Some parts suppliers apparently have received orders for April–June that are more than 50% larger than originally planned. 

As reported previously, Nintendo has been suffering from a Switch shortage owing to problems with its supply chain, which forced it temporarily to halt shipments in Japan earlier this month. Gaming is experiencing a global boom due to coronavirus stay-at-home orders. Playtime for gamers has surged 45% in the U.S. and 38% in France, according to Nielsen.

What do we think?

What a delightful problem to have, more demand than you can meet. But it has a danger too. If consumers are hungry and want something, they’ll take it, or proximity from whomever they can. It also fuels a black market. Neither situation is good for the company. But, as we’ve pointed out many times, Nintendo is a smart company and have a brand loyal customer base even Apple envies. They’ll manage this.