- With millions of Americans staying home because of the coronavirus pandemic – many with children who are out of school – the Nintendo Switch is sold out practically everywhere.
- Retailers across the board are sold out, including Amazon, Walmart, GameStop, Target, and Best Buy. Nintendo confirmed the supply issue in an email to Business Insider.
- Worse still: Retailers like Amazon allows third-party resellers to jack up the price and overcharge people by hundreds of dollars. You can buy a Switch on Amazon right now starting at $550.
- Visit Business Insider’s homepage for more stories.
I was working on a news story on Monday when my phone buzzed, as phones do.
“Hey, question for you,” my sister-in-law texted. “Do you know why I can’t find a Nintendo Switch to buy that isn’t price jacked to over $500?”
I did, in fact, know. I even wrote a piece about it a few weeks ago. Nintendo has been unable to keep up with demand for the Switch, and the console is sold out everywhere.
“All the ones that are $299 are all out of stock,” she continued. “I’ve tried Amazon, Best Buy, Target, Walmart, GameStop – all online stores.”
She was experiencing the same thing that people all over America, stuck at home during the coronavirus pandemic, are experiencing: It's nearly impossible to buy a Nintendo Switch right now without paying nearly double the $300 asking price. It's similarly difficult to find the handheld-only Nintendo Switch Lite.
Nintendo confirmed as much a few weeks back, and things haven't improved since then. Company representatives sent over the same statement they did previously: "Nintendo Switch hardware is selling out at various retail locations in the US, but more systems are on the way. We apologize for any inconvenience." Weeks later and the situation hasn't changed.
Worse: Resellers on Amazon and eBay are listing the normally $300 console "jacked to over $500," as my sister-in-law put it. On Amazon, the least expensive Nintendo Switch I could find was $549.98.
Nintendo's Switch console is sold out for all the reasons you can probably guess: It was already a popular console, and everyone's currently stuck inside.
Nintendo also had tremendously fortuitous timing with the recent launch of "Animal Crossing: New Horizons" - a game that was already poised to be a hit, but has absolutely exploded with a dedicated audience of people stuck at home looking for a digital escape.
"It's huge. It's a system seller," Niko Partners senior analyst Daniel Ahmad said in a phone interview on Tuesday.
He also pointed to the ongoing pandemic - "in-home gaming is surging, because what else do you do?" - and the fact that Nintendo admitted to Switch supply issues, which "led to people rushing out to buy one."
But problems began earlier, in February. "In February, there were no consoles produced," Ahmad said, due to the impact of coronavirus on China's manufacturing sector. 90% of Nintendo's Switch consoles made for the United States are made in China, he said.
Though production has largely resumed, Nintendo is still playing catch up from the time it wasn't producing the console - thus, there are no consoles available to buy at the moment. "Because of this initial impact in February, and the fact that sourcing every single part is going to be more difficult now, that is leading to some of the supply issues you're seeing. And of course the increase in demand is beyond I think what even Nintendo expected."
Wedbush managing director Michael Pachter put it succinctly: "It's kind of the same story with toilet paper: we're not pooping more, but we're doing more of it at home instead of in restaurants and offices, so demand for in-home consumption rose before the supply chain was equipped to fulfill it."
According to Pachter, Nintendo planned to produce "20 million or so" Switch consoles in 2020. But with the coronavirus suddenly pushing millions of Americans indoors, demand for the console unexpectedly leapt.
"If [Nintendo] are making 20 million, that's around 1.7 million a month," Pachter said, "and they probably saw demand spike to 2.5 million in March and continue in April." With such a huge increase in demand relative to Nintendo's production rate, the console is simply sold out everywhere.
"It doesn't take a ton of incremental demand to throw Nintendo off of its production plan," Pachter said.
As for when things will return to normal, and the Nintendo Switch will become readily available again at its standard retail price? It may be a few weeks, if not longer.
Both Pachter and Ahmad said Nintendo is unlikely to ramp up production of the Switch in response to the current supply issues, and we're unlikely to see a replenished supply earlier than late May or June at the earliest.
The cost for Nintendo to add extra production to meet unexpected, unpredictable demand simply isn't worth it, according to Pachter. "The problem is that a production 'line' probably makes 3 million [units] a year, so if they add another line, they're committing to that many new units," he said. "I doubt they will increase capacity due to the pandemic."
Moreover, Ahmad pointed to the ever-important holiday season as Nintendo's annual bread and butter - a critical sales season that Nintendo is likely to focus on over the temporary spike in interest.
"We have to remember that, even though demand is very strong right now, the majority of Nintendo's sales are always in the fourth quarter of the year," he said. "Even though right now it's hard to find these products, they're still selling extremely well and they're selling more than they did last year."
