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Nintendo Switch shortage continues as parts still in short supply

Nintendo Switch sales surpass Wii in Japan

2020 may well be the worst year yet to try and buy a Nintendo Switch. Even with the explosive success of titles like Animal Crossing: New Horizons, consoles are notoriously hard to find. And it appears that the Nintendo Switch shortage may be much worse than the infamous Wii supply problems from years ago. It could be months before your local stores have any consoles back in stock. Nintendo has already halted shipments of new consoles in Japan, other issues could be coming.

There are multiple parts in short supply right now, across the electronics industry. The DRAM and other memory chips made throughout Asia are one potential consideration that is exacerbated by Nintendo having to compete with smartphone makers for finished chips. The Nintendo Switch shortage could also be made worse by a lack of manufacturing of new PCBs and passive components for these systems.

Nintendo is optimistic though. President Shuntaro Furukawa said as much during an earnings call this past Thursday. “We expect the Covid-19 impact on our production to go away by summer,” Furukawa said.

That projection comes off of the back of a noticeable slide in the stock prices for Nintendo. This drop comes after Nintendo projected a major drop in console sales year-over-year thanks to COVID-19. Last fiscal year, Nintendo sold an estimated 21 million Nintendo Switch consoles. And many analysts expected that number to remain stagnant at best, given the current supply issues.

This could be a major issue for the later 2020 shopping season, as the COVID-19 pandemic will likely have a lingering impact for some time until a vaccine is developed. Shoppers could be hesitant to head back to the shopping centers and large crowds this holiday season, and for good reason. Without a vaccine, there’s no hope of herd immunity having been established to protect people in these situations. And many predict that this will lead to further production issues too.

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“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.

A new projection for 2020 says that there will be around 19 million Nintendo Switch units sold in 2020. The supply shortage comes on the back of quarantines and work stoppages across the globe hoping to halt the spread of the deadly new novel coronavirus. Currently, more than 4.3 million people have been sickened by the disease, with more than 290,000 people having died as a result.

But it could be that not only Nintendo will be hit with supply problems. PS5 and Xbox Series X consoles are reported to begin production in June 2020, and we could see similar component shortages for these new consoles as well.

Source: Bloomberg

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