Why Nintendo can’t help the Switch shortage
With Splatoon 2 out in stores today, countless people are walking away from retailers without a shiny new Nintendo Switch.
This is not just due to the strong demand for the system, there are many other factors why its hard to find Nintendo’s hit hybrid console. Often, I read comments where players wonder why Nintendo just doesn’t get their shit together and make more units. Many believe they are intentionally doing this.
I’d like to address two things in this opinion piece: Why Nintendo isn’t intentionally supply constraining their product and why it isn’t easy to rectify it.
First, the idea of Nintendo intentionally doing this. That’s ludicrous. This is the same company that had to stopped production of both the GameCube and Wii U because of excess inventory. Yes, they had much more realistic sales goals for the Switch out the gate. That’s a smart decision because despite the Switch’s obvious appeal, anything could happen. Why not aim low and be surprised when things go better?
They are losing money here folks. Many consumers may just give up on buying a Switch for now. Any way you look at it, 100k lost customers during any given month means they are losing money. The company makes a profit on each system, and even if its a small profit like $10 or less, that’s still money they’d rather have in their pockets.
Now, let’s look at the idea that this shortage could be easily solved. It can’t. Okay, article over. Just kidding.
There is an industry wide shortage of NAND flash memory chips, rumored to be due to Apple’s production of the iPhone 7S and iPhone 8, which are supposed to come this September. Apple was ordering tens of millions of these chips and since they’re one of the top companies using flash chips, they get what they want. With the iPhone refresh just over two months away, this production may have slowed down since many of the units have potentially been made already.
So why doesn’t Nintendo simply change the Switch’s flash memory? That too isn’t easy.
They cannot swap the 32GB flash memory for a smaller amount, that would be bad P.R. They can’t upgrade it to 64GB, a higher amount, because that would add significant costs to the console. Let’s say you swap the 32GB for 64GB and Nintendo pays $10 more per unit for it, which is entirely possible going by flash memory prices. If they sell 10M units with an increase of $10 costs vs what they originally planned to pay that means they will lose $100M. That’s a lot of money.
Some users have pointed out that the flash chip on the system’s motherboard can be swapped out so it should be easy to make this change physically. They would be right except when you consider the added cost of going to 64GB, it would not be worth it in the long run unless they want to cut significantly into profit.
Nintendo is unable to use smaller flash chips to make up the 32GB because any other configuration would likely require them to redesign the system’s motherboard entirely. It is already designed tightly as is, putting in anymore memory modules would not work without significant research and design.
If the flash memory shortage is the real culprit of Switch shortages, and it likely is, Nintendo is smart to wait it out until the industry wide shortage ends this summer. If it is really due to Apple’s iPhone, Switch production should be able to increase in August or September, when Apple has finished producing their big initial batch of 7S and 8 models.
It sucks that you can’t find a Switch, it really does. I hope you have luck finding one soon but there isn’t really a good option for Nintendo other than waiting it out. Hopefully this all becomes a thing of the past for both Nintendo and consumers.