Nintendo warns coronavirus will dent console production
Japanese games giant Nintendo has warned today that the coronavirus outbreak meant “unavoidable” delays to the production and shipping of its Switch console to Japan.
The virus has now killed 563 people and infected more than 28,000 in China. Beijing has put the country on lockdown in a bid to contain the spread, limiting its productive capacity.
Shuntaro Furukawa, the chief executive of Mario Kart-maker Nintendo, said last week that the outbreak was holding back production at its Chinese factories.
Other products such as the Joy-Con controller and Ring Fit Adventure gadget are also likely to be affected, Nintendo said today.
The Japanese firm started to shift some of its production away from China to Vietnam in 2019 amid the US-China trade war, but its new sites do not have enough capacity to keep up production levels.
Nintendo is the latest in a long line of companies that have warned of the economic effects of coronavirus.
Nike said earlier this week that it expects to take a “meaningful” hit from the virus, adding that it was “operating with reduced hours and experiencing lower than planned retail traffic”.
Yesterday, Nintendo’s compatriot Toyota warned that sales would be dented as there was no “mood to buy cars at the moment”.
However, Deutsche Bank analysts said they expect the full-year impact of the virus on the Chinese economy to be “limited”.
They said they think “it’ll have a one to 1.75 percentage point impact negatively on China’s first-quarter GDP growth”.
“But assuming some modest catch-up of production and demand in the subsequent quarters of the year, the full-year impact will likely be limited to 0.2 to 0.3 percentage points.”