Nintendo (NTDOY +0.89%) 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.
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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.
