Nintendo Co. Ltd. has announced an increase of in the production of the Switch — the company's popular handheld console — citing a stay-at-home surge in orders, the Nikkei Asian Review reports. This is likely in anticipation of the holiday season, where changed consumer preferences may lead to a boost for business that can supply "socially distanced" goods. Panjiva's research of Aug. 12 noted that the holiday toy season has started slowly, something that Nintendo may be trying to make up for with a late-season increase in output.
Sony Corp. may see this as well but has had trouble ramping up production of its new console, according to Bloomberg News. The company, maker of the PlayStation line of consoles, likely plans on launching the new PlayStation 5 in time for the holiday season but has had trouble manufacturing the system-on-a-chip that drives the unit.
Panjiva data for U.S. imports of video game consoles shows a mixed picture. Imports from China, accounting for 90.4% of U.S. imports by value in 2019, saw a 36.4% year-over-year decline in the second quarter. Importers started to switch their sourcing to other Asian countries including Vietnam, leaving the second quarter of 2020 with an increase of 895.7% year over year. Factory closures related to the COVID-19 pandemic hit imports from China hard in the first quarter, but may recover in the second half ahead of a strong holiday season.
A comparison of U.S. seaborne imports associated with Nintendo, PlayStation and Xbox using Panjiva shipment search data gives a more up-to-date view on how brands are adapting to the pandemic.
Nintendo and PlayStation have both experienced a decline in imports, including those of accessories and games for their consoles, with a drop of 9.9% and 31.3% year over year, respectively, in July and August.
Microsoft Corp.'s Xbox brand saw a 56.5% increase in year-over-year shipment volumes, indicating a large ramp-up. This may be related to the launch of a new line of Xbox consoles on Nov. 10 and Microsoft may want to ensure sufficient supply for a likely important holiday season.
Eric Oak is a researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.