Nintendo Struggles to Produce Enough Nintendo Switch Consoles

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According to a Question and Answer Session with investors, Nintendo is struggling to produce enough Switch consoles to meet demand. Moreover, Nintendo seems to be unsure as to how units they can produce this year given the volatility of the supply chain.

Although we are currently striving to produce as many units as possible, the fact is
that our production plans are more uncertain than they were at the beginning of previous fiscal
years. Our full-year sales plan is based on the premise that we can secure the materials
necessary for production, but if we are able to produce more units, we will work hard to meet
the strong demand, and to be able to ship and sell those units.

Nintendo Q&A Summary

The Nintendo situation reveals a continuing trend for electronics manufacturers. Just as Sony and Microsoft have struggled to produce enough consoles, so to Nintendo is now struggling. However, Sony and Microsoft introduced their new consoles just as manufacturing became very difficult; Nintendo at least has the comfort of already selling plenty of Switch units.

One of the issues in creating enough technology in 2021 is the shortage of semiconductors worldwide. The shortage is so dramatic that various semiconductor production companies and gauges are losing profitability at a time when tech is more in-demand than ever.

Semiconductor ETF (SOXX) Market Tracking

The question is now whether Nintendo can hit its approximate 25 million goal worldwide for 2021 Nintendo Switch units produced. The answer thus far seems to be more optimistic than realistic. So is the world headed for another Christmas season that seems hollow of technology gifts? It’s too early to say at this point, but signs are pointing towards a rocky path in getting parts sourced for our favorite games, electronics, and devices. Will this potentially dissuade Nintendo from releasing a new 4K Switch in 2021?

Luckily the company famous for Super Mario Brothers is coming off of their most profitable year ever in the history of the company. But for smaller players in electronic devices, the year could be quite rough until semiconductor and other component supplies are restored to adequate levels.


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