From the Financial Times:
Nintendo’s US chief has warned Switch customers to prepare for potential disappointment this Christmas, as demand for its hit games console continues to exceed supply.
Since the Switch launched in March, the hybrid console — it can be used as a handheld device on its own or plugged into a television at home — has been selling out almost as soon as new stock arrives in stores around the world.
In Nintendo’s domestic market of Japan, the shortages have been especially acute, with new machines being sold by lottery or changing hands on auction sites at double the retail price of around ¥30,000 ($280).
In an interview on the sidelines of Variety’s Entertainment and Technology Summit 2017 in Los Angeles, Reggie Fils-Aimé, president of Nintendo of America, told the FT that supply shortages of multiple components, coupled with higher-than-expected demand from customers, were behind the protracted shipping delays.The problem? Multiple choke points in the supply chain, apparently, as Nintendo compete for the same memory chips and other parts that other competitors (like Apple, Sony, and Microsoft, to name a few) also need for their new devices. Everyone's paying more for everything, right now, as anyone who's tried to buy a Ryzen processor can attest, but the Switch's low price point leaves them less room to absorb extra costs in the manufacturing process, and their smaller size (compared to Apple, Sony, and Microsoft, anyway), along with the WiiU's failure, leaves them less able to simply absorb the costs and sell Switches at a loss in order to build market share.
The good news? Nintendo has apparently decided that it makes sense to manufacture whatever consumers are willing to buy, which means that they're bringing back the NES Classic, as well as promising to make enough SNES Classics that everyone who wants one can buy one, and without having to spent four times MSRP to get it off eBay. The only catch is that the NES Classic and SNES Classic are being hit by the same component shortage as the Switch, so stock levels likely won't recover properly until 2018.
For Nintendo, of course, this means that they'll miss the busiest sales season of the year in EU and NA, losing market share to Sony and Microsoft who will undoubtedly have PS4s, PS4 Pros, XBO-Ses, and XBO-Xes available for sale to any who want them. Considering how badly Nintendo need for the Switch, in particular, to reach 10M sold in order to make up for time lost to the WiiU fiasco, this is obviously bad news; it's especially unfortunate since Nintendo's supply problems seem to be due to circumstances beyond their control, this time. Whether these supply chain problems end up being disastrous, in terms the Switch's success or failure as a platform, remains to be seen.
In the meantime, however, consumers should plan to buy their Switches and Classic consoles as next year's birthday presents, rather than this year's X-Mas presents. If you must have a console this year, buy a PS4 or an XBox rather than pay scalpers' rates for Nintendo's products (even Reggie Fils-Aimé is advising consumers not to pay more than MSRP).