Gamers, get ready: Nintendo’s Switch should be available again soon. But maybe not for long
Nintendo Switch video game consoles have been difficult to find during the coronavirus pandemic. People stuck at home have been snapping up them up while the number of the consoles produced has tumbled because of shuttered factories.
So what gives? And when will Switch supplies return to normal?
The coronavirus Switch-up
Michael Pachter, an analyst for Wedbush Securities, said that Nintendo likely started increasing Switch production in mid-June. The first of that batch are probably on a cargo ship, he said, and that console availability will return to normal in early September. “I think we’re probably really close,” he said.
That will be welcome news to many people. In the last week of March, when lockdowns went into effect in many countries, global Switch had sales soared to 800,000 from just over 200,000 the previous week, according to VGChartz and UBS.
But starting in February, many Chinese factories producing the Switch shuttered for nearly six weeks to help control the pandemic there. Components also became hard to come by.
By late April, Switch sales briefly dropped below pre-pandemic levels because of the shortage. Those issues now appear largely resolved in many countries, and worldwide sales are once again higher than before the outbreak.
But in the U.S., a shortage continues. Standard Switch consoles are currently unavailable from GameStop or directly from Amazon U.S. (Neither company responded to a request for comment.) Resellers on eBay are selling them for around $400, a 33% markup from the $300 retail price. On Amazon, resellers are listing even lightly used units for as much as $375.
The Nintendo Switch Lite, which plays the same games as the Switch but is meant for play on the go and doesn’t connect to home TVs, is available at many American retailers, including Amazon and GameStop. That appears to reflect greater demand for the Switch home console than the portable version.
The unknown: demand
The pandemic has increased demand for the Switch so drastically that Nintendo may unable to meet it, even with increased production. Before coronavirus, Nintendo said it would sell 19 million Switches worldwide in 2020, but many analysts expect the company to sell more.
Still, Pachter, the Wedbush analyst, said there’s a limit. Because of market realities, Nintendo may avoid adding too much capacity.
He said that Nintendo would have to commit to increased production for three-to-five years. With the pandemic potentially winding down in 2021, Switch demand could decline. Moreover, Nintendo is expected to unveil a new Switch next year, which will make leftover inventory of the current Switch harder to sell.
Nintendo has not yet revised its full-year Switch delivery estimates, and declined to answer questions about 2020 production targets. Regarding the current shortages, the company said in an Aug. 6 earnings report that “because there is a time lag between production and the stocking of store shelves, and because demand remains strong, there are still shortages in some regions.”
And then there’s a final unenviable X-factor in Nintendo’s calculations: the upcoming holiday season, when console sales typically peak. According to Pachter, Nintendo usually stockpiles consoles during the first half of the year to get ready for a surge late in the year. He said the company is likely stockpiling consoles now, too, which would contribute to shortages in the near term.
But the pandemic has upended the normal logic of the holiday shopping season, in at least two ways. First, there’s “pull forward”: How many people who bought a Switch in April would have otherwise waited eight months and bought one for Christmas?
Even tougher: What about the recession? Unemployment has reached record levels in the U.S.. Entertainment usually holds up well during downturns, but the nature of the current crisis makes projections difficult.
“Nobody knows,” says Pachter. “We didn’t have consoles in the Depression.”