There Could Be Switch Shortages This Holiday And Here's One Reason Why
Reggie Fils-Aime talks about the "choke points" in the Switch's supply chain.
Nintendo cannot guarantee that there will be enough Switch units in the marketplace this holiday season to meet demand, executive Reggie Fils-Aime said during a recent speaking event. Now, Fils-Aime has provided some further context about what he called "choke points" in the manufacturing chain.
The executive told The Financial Times that the supply chain for the Switch is "complex," adding that there are multiple components that could be "choke points." The FT quotes analysts in Japan who call out one company in particular, Alps Electric, which makes components in the Joy-Con controllers. However, Fils-Aime wouldn't give any details on particular sections of the Switch's supply chain.
"There is not one choke point, there are multiple choke points," he explained. "I won't go into any more detail but it's not just one component. I'm going to make millions of these units to flow into the marketplace. But what I don't know is what the demand is going to be. And there is a potential that demand is going to outstrip supply."
Fils-Aime went on to say that he wants to avoid a situation where consumers want a Switch and can't get one. But the reality of the production of any piece of technology and strong demand means he cannot guarantee there won't be shortages. "We don't want to have a consumer disappointed by not being able to get one for the holiday season. But managing that complex supply chain is a challenge," he said.
Last month, a Nintendo spokesperson said, "We're doing everything we can to make sure everyone who wants to buy a Nintendo Switch system can do so," adding that the company will "ramp up production for the holiday period."
As The Wall Street Journal notes, if Nintendo is looking to produce more Switch units than it had previously modelled, that could lead to some delicate conversations with suppliers over terms. Nintendo has modelled 10 million Switch sales for the current fiscal year, which runs through March 2018. As of June 30, the latest period for which official data is available, the Switch had sold 4.7 million units worldwide.
The holiday season is an important time for Nintendo and others. One of Nintendo's biggest new game releases during the period is Super Mario Odyssey, which comes out on October 27 for Switch.
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