Nintendo Switch parts supply has been limited because of lockdowns in Malaysia and the Philippines.
It appears that Nintendo Co. is in hot water now since the company is striving to procure some essential components for its popular Switch console by dint of government-imposed lockdowns in Malaysia and the Philippines. According to a source familiar with its operations, it is likely that the production will be limited this year.
Malaysia and the Philippines have taken several extreme measures over the concern of the coronavirus pandemic such as limiting business operations and travel in an attempt to prevent the spread of COVID-19. Malaysia has relaxed its lockdown since May 4, opening doors for most forms of economic activity. Nevertheless, another challenge rises when companies endeavor to get all workers tested before returning to work.
A Nintendo spokesperson declined to comment.
The impose leaves Nintendo in dire straits since it is foreseen that the company cannot exceed its forecast of 19 million Switch unit sales in the current fiscal year. It is considered as a disappointing prediction, especially after the switch is out of stock in many markets across the globe after the record-breaking success of Animal Crossing: New Horizons.
Nintendo’s forecast would mean a decline in Switch sales from the 21 million consoles it sold in the last fiscal year, despite the device’s soaring popularity. Restoring full production capacity will largely depend on how the pandemic situation develops, and Nintendo may have to delay the release of some games and services if things don’t improve, President Shuntaro Furukawa said on its earnings call on Thursday.
“We expect the Covid-19 impact on our production to go away by summer,”Furukawa said. Furukawa said.
Rivals Microsoft Corp. and Sony Corp. plan to introduce new iterations of their consoles later this year, putting pressure on Nintendo to capitalize on the Switch’s popularity before the competition arrives. The Xbox and PlayStation teams source components from other countries and are therefore not affected by these particular lockdowns.
The PCB and passive components shortage is now Nintendo’s most pressing supply constraint after it previously had to also contend with a production bottleneck in China. Limited access to DRAM, for which Nintendo has to compete with smartphone makers, could also have an impact in the latter half of the year.
“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.
Philippines President Rodrigo Duterte is considering reducing some of his country’s lockdown measures from May 15, a spokesman said last week, while the Malaysian government has decided to continue what it terms a relaxed lockdown until June 9.