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Nintendo coronavirus impact: Switch console deliveries delayed

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Character of Nintendo’s franchise Mario is seen at a promotional booth for the video game “Mario & Sonic at the Olympic Games Tokyo 2020” during the Tokyo Game Show in Makuhari, Chiba Prefecture on September 12, 2019.

Charly Triballeau | AFP | Getty Images

Nintendo said production and deliveries of some of its products, including its flagship Switch console, will be delayed due to the outbreak of the new coronavirus.

The gaming giant said the Switch and the Joy-Con controllers that go with it, which are made in China, will be among the products affected. Nintendo noted that this will have an impact on its domestic Japanese market only.

It also said that “Ring Fit Adventure,” a video game with an accessory which is currently out of stock, will be delayed.

“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 in Japanese, translated via Google.

The coronavirus, which originated in China, has spread across the world and claimed the lives of over 500 people.

Last year, Nintendo did move some production of the Switch from China to Vietnam.

While Nintendo warned about delays in Japan, Daniel Ahmad, senior analyst at games market research firm Niko Partners, said that it could become a problem in other markets like the U.S. 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 told CNBC.

“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.”

The analyst noted that in China itself, where the Nintendo Switch recently launched, some Nintendo products are experiencing shortages.

Nintendo did not give guidance on what kind of financial impact this could have.

Serkan Toto, CEO of Tokyo-based game industry consultancy Kantan Games, said “the effect (on Nintendo) will depend on how long this delay lasts.”

He noted that in 2017 there were huge supply shortages of the Switch in Japan because of high demand, but people still waited to buy it.

“So Nintendo already had a similar supply problem domestically that lasted for months, albeit for different reasons. It didn’t hurt demand later,” Toto told CNBC.

“I think you will see the same with the Switch, the ‘Animal Crossing’ special edition and ‘Ring Fit Adventure.’ People will buy these later.”



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