In February Bloomberg warned that Nintendo only had enough inventory to last through April. That may be coming sooner than expected. In fact, it appears to already be here. Best Buy, Gamestop, Amazon, Walmart, and Target are all showing as out of stock. Although currently, the Switch Lite is able to be ordered from a number of places. The expedited Switch shortage might be due to how unbelievably well Animal Crossing New Horizons is selling.
While Nintendo Switch consoles are not assembled in China, the chipset is. Currently, Nintendo sources hardware from China and assembles consoles in Vietnam. Manufacturing and shipping facilities have been shut down in China since late February. China is just starting to return to work this week. Foxconn factories where the iPhones are made are hoping to return next week.
What Does This Mean For The Rest Of The Year?
We could be looking at a one or two-month shortage in supply for Nintendo. This could turn bad for them if they are out of stock now. Normal supply levels could return in 30 days. However, there is going to be a significant back order to fill that could extend that horizon out further. Compounded with this issue, some publishers are unable to get their physical games. We spoke with three anonymous publishers that confirmed the issue with us. When pressed to elaborate what was causing the backorder one publisher said it was “at least collector’s edition items.” The other two publishers were unsure specifically if it was the cartridge or the case.
The Switch shortage could be an explanation for the lack of solid forecasting we normally see this quarter from Nintendo. While there is rumored to be an upcoming Nintendo Direct to showcase games coming this year. It’s rare to see Nintendo wait this long when it comes to showcasing games coming the first half of the year.