Coronavirus Causing Delays For Switch Shipments In Japan
"96% of video game consoles imported into the U.S. in 2018 were produced in China."
Production and shipping of the Nintendo Switch, Joy-Con controllers, and other Nintendo peripherals like Ring Fit Adventure, will be delayed due to the outbreak of the new coronavirus, in a move the company says is "unavoidable."
Nintendo notes that this will only have an impact on the domestic Japanese market, but Daniel Ahmad, senior analyst at games market research firm Niko Partners, told CNBC that it could become a problem in the U.S. and other markets too.
"China is important for manufacturing of some game hardware, phones, and other components, and we believe that the entire supply chain of manufactured goods will be impacted--much more than just games," Ahmad explained.
"When looking at games consoles specifically, we note that 96% of video game consoles imported into the U.S. in 2018 were produced in China. Whilst companies such as Nintendo have moved some manufacturing abroad, China still accounts for the majority."
Due to the Sino-U.S. trade war affecting supply chains, Nintendo began moving some of its production from China to Vietnam in 2019, but the Southeast Asian country doesn't have enough capacity to offset the disruption caused by the coronavirus outbreak.
"We will continue to work to deliver products as soon as possible while paying close attention to the effects of the new coronavirus infection, and we look forward to your understanding," Nintendo said in a statement.
The coronavirus has spread across the world and claimed the lives of over 500 people since originating in China. Aside from its effect on Nintendo's production and shipping, the virus has also impacted video games in other ways. Sales of Plague Inc., the real-time strategy game about creating a deadly pathogen, recently spiked as people purchased the game trying to gain a better understanding of how viruses can spread. Blizzard was also forced to cancel multiple Overwatch League events in China, and organizers of the Tapei Game Show postponed the annual show until later this year.