April 21—Nintendo wants to increase production of its Switch console to meet a coronavirus pandemic prompted increase in demand. However, COVID-19’s disruption of the corporation’s global supply chain has hindered its efforts to increase manufacturing output.
Consumers are Hungry for the Nintendo Switch
Because it launched in 2017, Nintendo intended to reduce Switch production this year because its Wii console dipped in popularity during its fourth year in release. However, coronavirus pandemic motivated demand caused the Japanese electronics company to increase its production quota by 10 percent.
However, COVID-19 has prompted governments to issue lockdown orders that have pushed millions of students and employees to work remotely.
As a result, homebound citizens have increasingly taken to playing video games to relieve their stress. Notably, Microsoft, Sony, and Valve have experienced record consumer engagement on their respective online gaming platforms. People have also looked to a particular Switch title to alleviate their boredom and loneliness, “Animal Crossing: New Horizons.”
Since its release on March 20, the Japanese company has sold 3 million physical copies of the title in its domestic market. “New Horizons” has also been a massive hit in the U.S., enjoying the third-best ever launch for a Nintendo game in the region. Moreover, Venture Beat notes it is the second best-selling game of the year behind “Call of Duty: Modern Warfare.”
However, whereas “Modern Warfare” provides users with an adrenalized tension release, “New Horizons” sates the need for normalcy and community. The title lets players engage in mundane but satisfying activities such as gardening, fishing, and virtually interact with friends. Morningstar Research analyst Kazunori Ito pegged the game’s relaxing nature as the key to its popularity. “The game is the perfect fit for people today because you can spend unlimited hours in the warm and gentle world.”
Why the Nintendo Cannot Meet Switch Demand
As with most electronics manufacturers, Nintendo has experienced significant production and logistics disruption because of COVID-19.
The firm depends upon Foxconn to assemble its Switch consoles, and the Taiwanese company temporarily closed its Sino factories two months ago because of a government mandate. Though the firm fully recovered its production capacity in March, it has reportedly prioritized the manufacture of Apple’s iPhones. Consequently, Nintendo tasked its Vietnamese suppliers with assembling its video game systems, but unit availability is still constrained.
Bloomberg reports the company is also struggling to find adequate supplies of DRAM to support an uptick in console production.
Nintendo first signaled demand for its flagship console exceeded its production capability in February when it warned Japanese retailers of limited availability. The console is now sold out in the region and is not available through most major U.S. electronics retailers.
As Nintendo is introducing a “New Horizons” update this week, interest in the title is unlikely to diminish anytime soon. As such, it would be ideal for Nintendo to resolve its supply line issues as quickly as possible.