Nintendo has confirmed that they are reducing their production of Switch consoles by 20% due to the ongoing chip shortage.
It was Nikkei (via Eurogamer) reported that Nintendo has been forced to change its production schedule for the remainder of this fiscal year, and is now committed to manufacturing 24 million Switch consoles, a reduction from their original target of 30 million.
In a brief statement, Nintendo said it “assessed the effect” the chip shortage had on their hardware production, while President Shuntaro Furukawa said the company felt it could not meet current demand, which he described as “still high”.
The decrease in production has resulted in a decrease of 37% in Nintendo Switchsales compared to last year, where September marks the company’s third month in a row with a decline in sales.
Since the hybrid system was first launched in 2017, it has sold over 89 million units. Although it does not yet quite match the 102 million Wii units sold, it is believed that the Switch is about to surpass that milestone.
Analysis: What do we mean when we say “chip shortage”?
As we explained in our TechRadar Pro article can no one really says when the chip shortage will end. Using the term “global chip shortage” is a simplification, as it does not really explain the complexity of the semiconductor supply chain, nor the difference in the type of chip we are talking about. As a result, different people mean different things when they refer to the chip shortage – for example, the shortage affects the automotive industry differently than the electronics sector.
“The term ‘chip’ covers a wide range of different chip types,” Alan Priestley, VP analyst at Gartner, told TechRadar Pro. “While some circuits may be available, they often require other circuits to be used. For example, processors require power management chips, and although processors are not in short supply, power management chips are.”
As previously mentioned, the current production is in principle maximized, and without signs that demand will level off, it looks like the shortage will continue until new production facilities are built. And since it takes at least two years to get a plant in full operation, it may take until around 2023 before chip levels stabilize.
We expect that Black Friday 2021 and Cyber Monday will offer a bunch of different offers Nintendo Switch-spel, hardware and accessories, but the decline in production may mean that the console will be more difficult to obtain in the future, depending on what the demand will look like.
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