As the trade war is raging on, Nintendo has to find solutions to keep its productivity going. (Image via: Business Insider)
Nintendo Moves Its Conveyor Belts to Vietnam, More to Follow: Experts
ASEAN is on fire. Since the trade war currently raging between China and the U.S., one of the famous gaming companies, Nintendo, had to search for every nook and cranny to keep their conveyor belts going, especially after they announced the upcoming release of Nintendo Switch Lite which will be released in around September 2019.All along, Nintendo had to rely on Chinese contract manufacturers in order to produce and to meet the targeted amount of supply of their consoles. Hon Hai Precision Industry, generally known as Foxconn, is one of the manufacturers.
Since the trade war emerged, Nintendo had been trying to diversify its production line which was heavily supported by the Chinese. In addition, Nintendo is also trying to avoid tariffs hike slapped by Donald Trump starting last May. Despite the hike being halted by Trump and Xi’s negotiation on the sidelines of the G20 Summit, Nintendo still finds the uncertainty risky.
After a series of searching to and fro, Nintendo finally decided to relocate its production factory to Vietnam. The Japanese gaming giant will move its production factory starting the 3rd quarter of 2019.
The American really loves Nintendo Switch. In 2017 alone, about 40% of Switch’s global sales, 17 million units, came from the U.S; hence, making Uncle Sam as the biggest buyer of Switch.
On the other hand, China is also the production house for notable console makers such as Microsoft with their XBOX One and Sony with their Playstation 4. Experts pointed out that the 2 console moguls might also follow after Nintendo’s stead, by diversifying their factories to other regions in order to minimize the risk of higher tariffs.
Source: https://www.ft.com/content/c6e99e34-a221-11e9-974c-ad1c6ab5efd1
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