 Hey everyone welcome to your Monday February 17th And we have some news for you about Nintendo and why we actually might need to worry about the supply of Nintendo switch in North America, and this is a big deal since animal crossing New Horizons launches March 20th and Nintendo might be having some issues getting switches to the United States now There is already a supply constraint as announced by Nintendo in Japan In fact many retailers right now in Japan are completely sold out in Nintendo switches And the reason for this is obviously that virus outbreak in China I can't even say it by name because it demonetizes the video, but there is a virus outbreak in China We all know about it. It's been a global issue in some cases. There was actually a case of it really close to my home so it's obviously spreading and While there has been no cases of death in the United States There's been a ton in the in China and obviously they're waiting to try to get that completely under control as the Amount of people infected and the death toll keeps rising every single day So we're kind of keeping some tabs on the global market here And this is affecting Nintendo and while Nintendo switch units for United States are actually made in Vietnam The supplies for those switches still come from China So here's an article from Bloomberg by one of our favorite reporters Takahashi Matsuzuki This is Nintendo is likely to struggle to supply sufficient switch consoles to its US and European markets as soon as April due to a production bottleneck caused by the virus outbreak According to people with knowledge of the company's supply chain Limited component supply coming out of China is affecting output at a Nintendo assembly partner factory in Vietnam Which the gaming giant primarily uses to provide consoles for the US said the people Asking not to be named because of the details are private a shortage of components this month would affect switch units scheduled for arrival in April after existing inventory and current shipments of the console has sold through The potential slowdown would deal a blow to the coyote base company Which is preparing to release a major new installment in the hit animal crossing game franchise on March 20th They're a life blood of the system a little blah Nintendo did apologize earlier this month when it announced its which hardware And accessory shipments in Japan will be constrained by a virus imposed production shutdown in China These products are now out of stock across many Japanese retailers do also in part to aggressive cashback campaigns by local mobile payment Providers do not see any major impact on the shipment to the US currently But we will remain vigilant and take steps if necessary a Nintendo spokesperson told Bloomberg news It's possible the supply will be affected by the virus if it becomes more widespread and prolonged Switchers arriving in the US in February and March won't pose any issues because they've already been dispatched from Asia Said the people familiar with Nintendo's operations But difficulty may arise with the accumulating enough units for the boats departing later this month or next Which would be arriving in the US in April shipments would not completely stop But will be greatly reduced according to one person US is the company's biggest market accounting for 43% of its core business Europe accounts for 27 Japan 21 Etc. Let me see here. It says that suppliers within China factories Which provide components to a wide variety of electronic products said they expect the virus disrupting to last at least a few more weeks Before they can resume full operation speaking on the condition of on amenity They said their primary concern is resuming production too early and finding a coronavirus Infection among their return workers. They need to outbreak on factory floors This exact fear was also voiced by Apple supplier Foxconn in a recent conversation with investors So basically it's going to be almost a month before factories are back to full operation in China Which is going to lead to a slowdown for a month-long slowdown for Nintendo Other people as well, you know other electronic providers are you're gonna see you slowdown as well So basically if you want to guarantee if you're waiting as an example if you're waiting to buy a switch For animal crossing you might want to go get it now because the supply is going to be more and more constrained by the time We get to the end of March So yeah, if you're someone waiting waiting to buy one of these for animal crossing in the United States or Europe It might be a good idea to get one now unless you want to wait until you know April May You know you want to wait till May or June to potentially get one then, you know Whatever, but if you were planning to go on around the launch of animal crossing It's possible there might not be that many available at launch for animal crossing even though they said supply in March Won't be constrained because of this news coming out You know people might be buying switches at a higher rate than normal in the US and Europe Leading to them running out because that's kind of what happened in Japan here See Japan had enough units, you know presumably to get through February, right? They had plenty of units to get through February But because of the news of the supply constraint coming to Japan People went and bought alt switches over the last two weeks and because of that now stores are sold out when normally They would still have units for the rest of the month They don't anymore because people know that they're going to be supply constrained for a month or two So now, you know, they're looking to the United States We now know there is a supply constraint coming up in April Which could lead to a boost in sales for the rest of this month and obviously the beginning of March Which could lead to to basically having no units available except maybe pre-orders for the Animal Crossing bundle or the Animal Crossing switch at the beginning of Or on March 20th, I guess would be when that system comes out. So I'm very curious You know, we don't talk a lot about global events or politics or anything because this isn't really a political matter But this is a matter that does affect Nintendo and it's the first major one I can recall in my adult life anyways Because as a child I didn't pay as close of attention to the stuff But as an adult, this is the first major event I can remember that affects direct manufacturing of The of a Nintendo platform that's really popular now We have seen, you know, the Wii as an example be really supply constrained But that was just due to supply and demand that wasn't due to any major Event happening that was slowing down production It was Nintendo wasn't prepared for the demand and didn't have enough factories running at the time and it took a while from them to catch up This is different. They have enough factories running for switch demand But they just they can't make the supplies or can't make the parts fast enough to actually build a switch Whether it's the NAND flash module, they're waiting on or DDR4 or whatever it happens to be that they're waiting on They can't get enough of them quickly because the factories themselves are operating, you know 20 30 40 50 percent or whatever and a lot of these factories aren't just making parts for Nintendo They're making parts for other companies as well, you know Fox kind of example makes parts for many companies so Yeah, I'm very I'm very saddened by this news a little bit like I don't want to have to this the end of the world that oh my gosh There's gonna be a shortage on switches for a while. In fact, that's good for Nintendo It's gonna be a boon to their sales both before they run out of stock and then immediately when they're able to restock properly That it will also be a boon for sales as well because these shortages lead to more desire for people to buy Systems right now and then more desire to buy them when they're immediately restocked So who knows I mean this could act not be in a boon for Nintendo and they see low sales in April But a huge boost in May when the when the stock comes in and then they end up selling out because now the demand is so high Because people are worried it's gonna be sold out for even longer And obviously, you know the the projection by Foxconn and other companies that they'll be back to making parts in full in three weeks It's still a projection. It could take longer Last I checked the coronavirus over the last you know week or so hasn't necessarily slowed down So I don't know You know what what's gonna happen because it's clearly gonna you know getting outside of that one area in China So I don't know how it's gonna affect You know this stuff moving forward and here's the thing they could all come back to work And resume full production in three weeks only to have an outbreak at one of the factories Nintendo's parts are being made from and then the whole factory gets shut down and quarantined. So that wouldn't be good either So They're playing it safe right now by only having you know select workers still working the lines That they have you know have tested and everything's fine, but You know these factories employ thousands and thousands of people there's a very high chance that a breakout could happen Um, and that's why they're kind of waiting to play in the wait and see game Like when's it going to stop massively spreading? When are they able to treat it well enough that people aren't dying from it so much? I mean, I know there's a lot more people sick than than have died, but they're still a decently high percentage in china at least Um for us in the u.s You know we have to worry more about influenza and stuff that we do that by risk because our Even the people who have had it most of the people have had it clear their system And are fine because we have really really good health care in the united states No matter how much you want to argue about Um The cost of that health care, uh, we do have good health care So, um, we haven't had anyone, you know, even though we've had a low number of cases We haven't even had the same percentage of people Die because we've had zero percent die in the u.s So, um, you know how well china is equipped to deal with the number of cases I mean china is the most popular or the most populated place on the planet Um, so I can't imagine their health care system could handle nearly the amount of people they're having to handle Um, so I don't know you guys let me know what you think about all this down in the comments below Um, are you more likely if you don't own a switch to go pick one up? Or if you were thinking about picking up a switch for somebody else or switch light or whatever Are you more likely to go get one now while the supply is there or uh, are you going to Uh, be worried a little bit now one company that's probably gonna be happy about this is game stop Um, because supply constraints mean people turn to the used market Which means a lot of used switches are going to be selling in april So, uh, there is that and I won't be surprised that the used market ends up selling out On nintendo's refurbished, you know on their website likely selling out because uh animal crossing is a big deal I don't think you know anyone who doesn't think animal crossing is a big deal I don't think understands how popular that franchise has gotten since new leaf Um going into new leaf. It was kind of sort of uh, uh, you know low end zelda popularity two three four million seller After new leaf everything changed 11 plus million in sales There's no reason to believe that this isn't going to cross 10 million on switch eventually If not, you know within a month or two definitely at some point it'll be a 10 million seller on switch Animal crossing new horizon is going to be massive and it's going to push millions and millions of extra switch sales And it is like the de facto game to get for switch to start this year. So, um Man it's going to suck that nintendo is going to be supply constrained immediately after the launch of that game Basically a week later boom their supply constrained. Uh, but it is what it is. Uh, the world has to deal with worldwide You know fallout from things like this and it's really uh, nobody's fault at this point This is just the way the world works people get sick and sometimes it affects things and right now It's going to be affecting us gamers in terms of getting supplies in nintendo switch And here's the thing if it's affecting switch, I also still have to wonder in the back of my mind You know, I know sony and microsoft are kind of playing it off like it's not affecting anything But if it's affecting switch supply right now, how can we Expect it to not affect supply of xbox series x and playstation 5 because they use similar factories in china So I I have to wonder uh about all of that But you know what that's for a future debate if and when uh, we could get some news or uh, microsoft and uh sony announce anything about that but uh, anyways, thank you guys so much for tuning in I entertain your obajax from the nintendo prime Hopefully you enjoyed the city if you did drop a like leave a comment below Head to the channel subscribe hit that bell icon and i'll see you in the next video