Microscopic view of Coronavirus, a pathogen that attacks the respiratory tract. Analysis and test, … [+]
The continued spread of the novel coronavirus could impact the production of next-gen consoles, according to an analyst statement. Daniel Ahmad, senior analyst with Niko partners, says that while supply chain disruption has yet to impact console supply for the holiday season—which includes the launch of the Xbox Series X and PlayStation 5—another month or two without containing the outbreak could lead to shortages.
“If the coronavirus outbreak is contained within the next month or two then we would expect console manufacturers to be able to meet demand for the holiday quarter, both for current gen consoles and next gen console launches,” Ahmad said in a statement given to the Hollywood Reporter. “If manufacturers are unable to operate at full capacity before the end of Q2 2020 we could see an impact on the launch of next gen console launches, with either limited supply or delayed releases becoming the likely outcomes.”
We’ve already seen the impact of coronavirus on the Nintendo Switch, which saw shortages in Japan that are expected to effect the US and Europe in the coming months. The Switch shortages illustrate the central role of Chinese manufacturing in the global economy: Nintendo assembles the majority of its consoles in Vietnam, but was still affected by component shortage coming out of China.
Microsoft recently said that it will miss revenue guidance for its “More Personal Computing” segment, saying that the supply chain has not recovered as quickly as expected, according to CNBC.
If the virus is not contained in the next few months, the consoles could still launch with limited supply, keeping to the original timetable and hoping to increase volume in 2021. A delayed release would be an extraordinary result, but it’s clear at this point that the coronavirus constitutes an extraordinary situation.
Another analyst, NPD’s Mat Piscatella, suspects that we might also see increased activity in digital gaming as people spend more time at home either by choice or compulsion. Japan recently closed all of its schools to limit the chance of transmission, and people are cancelling travel and events all over the world. Digital gaming becomes not only a way to pass the time, but also a social activity with zero risk of transmission.
We recently saw record numbers on PC gaming storefront Steam, likely because of the extended Chinese holiday and lockdown measures.