They're not going to make it...

Back in July, when Nintendo Switch pre-orders were selling out instantly, and supply of the units was obviously an issue, the company was sounding confident that solutions were imminent, and that there would be plenty of Switches in stores for the busy XMas shopping season. "To take advantage of this favourable momentum, we will continue to bolster our manufacturing facilities and strive to increase production in preparation for the Christmas period, which has been factored into our forecast of shipping 10 million units globally by the end of this fiscal year," was what they were saying to DigitalSpy at the time.

By September, that had changed, with Reggie Fils-Aimé transitioning the company's message from confidently predicting amply XMas supply, to cautiously explaining to the Financial Times why that wasn't going to happen:

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.

Well, that nearly two months ago now, and it would seem that the  situation has not changed significantly, because M. Fils-Aimé is once again hard at work, getting out ahead of the story. From The Verge:

“Broadly speaking, it’s been a strong year and a strong launch for the Nintendo Switch,” says Nintendo of America president Reggie Fils-Aimé.

But even within one of Nintendo’s most important years, a lingering issue remains: supply. For many, the Switch remains hard to find in stores, even months after launch. A quick stock check at Best Buy suggests that supply and demand are finally starting to level out, thankfully. And while the SNES Classic fared much better than the original NES Classic, which was near impossible to purchase, it’s still nowhere near readily accessible to walk-in consumers at most electronics stores.

[...]

“I wish we would have more hardware. Our inability to meet demand is not something that is satisfying in any way, shape, or form. And we’re working hard to satisfy as much demand as possible.” Fils-Aimé says that the company has made changes to its supply chain to improve the situation, and notes that we’ll likely hear more on the subject next week, when Nintendo announces its financial results. “I expect that our chief executive Mr. Kimishima will comment on this,” he says.

So, to recap, the message has gone from We'll have enough, don't worry;  to This is why we might not have enough, actually; to We don't have enough, we're not going to this year, and my boss will comment further next week when he has to explain why our quarterly results are below expectations. Yikes.

I've said it before, and I'll say it again: Nintendo's Switch might be off to a brisk start, but they still have a lot of obstacles to get over, and they're a long way from being out of the woods. We'll have to see how the PS4 Pro and XBO-X sell over the holidays, and whether Switch sales continue to be brisk into January and February, but missing out on a significant portion of their XMas sales with a new gaming device can't possibly be how Nintendo wanted to launch the Switch.

Were you planning to buy a Nintendo Switch for X-Mas?

Or an NES Classic, or an SNES Classic? If so, either plan on paying "scalper" prices, or make other plans, because it doesn't sound like Nintendo are any closer to solving their supply chain problems.

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).