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Nintendo Want's Suppliers to Increase Switch Production Amid Surging Demand

By Donna Fuscaldo – Apr 21, 2020 at 10:29AM

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The Switch is getting a new life, but with supply constraints amid the COVID-19 pandemic, suppliers may not be able to meet increased orders.

Nintendo (NTDOY 0.87%) has been urging its Switch suppliers to boost production as it deals with a surge in demand brought on by the COVID-19 pandemic. 

Nintendo revised its forecast and now wants suppliers to meet its target for 22 million Switch devices over the next 12 months, reports Bloomberg, citing people familiar with the matter. 

Man playing a video game wearing a mask.

IMAGE SOURCE: GETTY IMAGES.

While 22 million units is in line with last year, it's up from the slight decrease Nintendo expected with the game console is entering its fourth year. Typically devices aren't sold out after having been available for years. Nevertheless, with millions of people sheltering in place, Nintendo is seeing increased demand and has revised its forecast upward as a result. 

In the U.S. the Nintendo Switch has been sold out at GameStop, Best Buy, and Walmart. That has resulted in price gouging, with some listings online pricing the game console at more than $500. The MSRP for the Switch is $300. 

Boosting unit production may not be easy. Most of the Switch game consoles are assembled in China and there are still constraints for certain components such as memory chips in the country. As a result, it's not clear if suppliers will be able to meet Nintendo's increased orders.  "We hope (suppliers) will be responsive to a production increase, but for the procurement of some parts, the outlook remains uncertain, and we can't forecast exactly how many Switch units can be supplied," a Nintendo spokesman told Bloomberg.

Donna Fuscaldo has no position in any of the stocks mentioned. The Motley Fool recommends Nintendo. The Motley Fool has a disclosure policy.

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