Nintendo Cuts Switch Production Due to Chip Shortage
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As the world faces chip shortages, tech gaming giant Nintendo cuts down its Switch production by 20%.
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Nintendo is facing a chip shortage and production cuts in Switch consoles.
While there were plans for Nintendo to produce up to 30 million Switch consoles, due to chip shortages that have affected tech produce worldwide, the productivity will be cut down to 24 million consoles through March 2022. That number is short of the 25.5 million controllers they promised investors in May 2021.
The tech world faces a chip shortage, that, according to industry insiders, will not be ameliorated any time soon. With the strong demand for Switch, supply could not be met as Nintendo faces 20% less production than the initial goal. "We are assessing their impact on our production," the spokesperson for Nintendo said, acknowledging the shortage in the semiconductors and other components.
According to Nikkei Asia, the Switch has seen a 37% decline in sales in September in comparison to the September of last year, which experiences a high demand for the device, especially during lockdown periods due to COVID-19. The Switch became the top-selling console in the period between 2019 and early 2021, as the PlayStation 5 hit the market. Although the PS5 sold fewer items, they made more money than the Switch.
What Nintendo may regret, furthermore, is their recent release of the Switch OLED, which is a more upgraded version of the Switch that contains bigger storage and a better screen - while new supply entails more demand, perhaps this must have been taken into account considering the chip shortage.
Some take advantage
Scalpers have been dealing with the shortage quite differently, taking advantage of the console shortage, and selling them at ridiculously high prices. They've benefitted from the chip shortage not only through the Switch, but also through Xbox One and PlayStation 5 - and, the Switch OLED could be next on their list.
Others seek solutions
Hyundai motors have recently taken the decision to start producing their own chips rather than relying on chipmakers for their products.
The global shortage of chips has affected the markets, closing multiple auto production lines this year - that includes some belonging to Hyundai.
"The (chip) industry is reacting very, very fast," Munoz said, adding Intel is investing money to expand capacity. "But also in our case, we want to be able to develop our own chips within the group, so we are a little bit less dependent in a potential situation like this," he said. "This takes a lot of investment and time, but this is something we're working on."
After witnessing the recovery of Asian markets, the company had decided not to cut down the orders during the pandemic, restoring confidence in the market.
