Nintendo Moves Switch Out Of China, New Models Tipped
In an effort to avoid US tariffs, Nintendo is moving production of its popular Switch consoles outside of China amid reports that the gaming company is “evaluating” cloud-based gaming.
Foxconn, the major supplier for Apple iPhones, has also stated that it is ready to move production for Apple and its subsidiary Sharp outside of China if necessary.
Although based in Kyoto, Japan, Nintendo relies on Chinese factories for assembly of its consoles and hardware.
Nintendo is tipped to unveil two new versions of the Switch this year, after announcing it would not be revealing a new console at this year’s E3 conference.
One is rumoured to look similar to the current console but with upgraded internal hardware, and the second is expected to be a budget version with a new look.
The WSJ is reporting that people involved in the supply chain confirmed that production for these two new models and the current console are currently underway in Southeast Asia, hinting the new consoles should be revealed soon.
A spokesperson for the company refused to comment on the two new consoles, but admitted that the Switch is made mostly in China and Nintendo is “always exploring options for where it assembles its products.”
Console manufacturers tend to sell their hardware on thin margins and make the majority of their profit from software, i.e. videogame, sales.
As the US increased import tariffs on Chinese technological goods to 25%, Nintendo may have to sell the Switch at a loss to consumers in the US.
Nintendo is facing stiff competition from Microsoft and Sony, set to launch their next-gen consoles in 2020 in addition to their cloud-based gaming platforms on the horizon.
Google’s Stadia gaming platform is also set to go live by the end of the year, and still, Nintendo has not thrown its hat into the cloud gaming ring.
In an interview with TechCrunch, Nintendo of America executive Charlie Scibetta said that the company is considering the concept.
“Streaming is certainly interesting technology. Nintendo is keeping a close eye on it and we’re evaluating it. We don’t have anything to announce right now in terms of adopting that technology. For us, it’s still physical and it’s digital downloads through our eShop.”