Nintendo (NTDOY) has long been accused of producing a limited number of its gaming hardware to create a frenzy among consumers who go to great lengths to get their hands on the latest and greatest. But when it comes to the Switch, which is sold out across the country, the company swears it's not on purpose.
Charlie Scibetta, a spokesman for the Japanese gaming company, told Ars Technica in an interview that it isn’t trying to trick its legions of Switch fans. “It's definitely not intentional in terms of shorting the market," the spokesman said. "We're making it as fast as we can. We want to get as many units out as we can to support all the software that's coming out right now... our job really is to get it out as quick as we can, especially for this holiday because we want to have units on shelves to support Super Mario Odyssey." Scibetta said it’s difficult to predict how long the shortages of Switch will last.
While the spokesman was adamant that Nintendo wasn’t purposely creating a situation where demand greatly outstrips supply, it has been accused of that practice in the past. Ars Technica pointed out the spokesman’s comments are similar to ones made by a Nintendo executive nearly a decade ago when consumers couldn’t get their hands on the Wii. Back then it said it wasn’t hiding units in warehouses to create demand. Gamestop (GME) Chief Operating Officer Dan Dematteo didn’t agree, saying then he thought the company met its Wii numbers for the year and intentionally slowed down supply as a result. (See also: Nintendo Switch Lifts Fortunes of Best Buy Stores)
Ever since Nintendo launched its latest game console, which is a portable gaming system and home console rolled into one, the company has been seeing red hot demand and has had to up its level of production. According to a recent Financial Times report, the company is increasing the number of units it produces for Thanksgiving and Christmas sales, which often peak in late fall. It is now targeting 18 million units of the Switch for the fiscal year ending in March 2018. Previously expectations were that it would ship 16 million of the gaming device in its fiscal year. One person close to the company told FT the move to ramp up production is also aimed at avoiding so-called “customer tantrums” as it rolls out its Mario Odyssey game for the Switch in November. That launch is expected to drive even more demand for the gaming system.
The gaming company is also facing a shortage of NAND flash memory chips, liquid crystal displays and the small motors that go into the hand-held controllers of the Switch. Many of the same components are found in smartphones, computers servers and other devices. The supply constraints could play a role in the lack of supply for the remainder of the year. (See also: Nintendo in Race to Acquire Key Switch Components)