Switch

Video games consoles can be expensive at the best of times and proposed tariffs on Chinese goods by the current US administration have the potential to drastically increase the cost of hardware of consumers. Recently, Nintendo, Sony and Microsoft penned a joint open letter highlighting the negative impact and disruption this would have on the industry as a whole. China and the United States have since resumed talks and these tariffs have yet to be enacted, but the continuing uncertainty and sanctions in place have led to several companies exploring alternative countries to manufacture their electronics.

The Nikkei Asian Review reports that Nintendo is one of those companies considering shifting a portion of production outside China to mitigate potential cost increases. Although Nintendo (and various other companies) declined to comment, sources report that it is looking to Vietnam as a possible alternative. The paper reports that HP, Dell, Microsoft, Sony, Amazon, Google and others are investigating potential alternatives.

Given the many years of manufacturing in China, the relationships the company has fostered and the obvious importance of the region, it's significant that Nintendo is eyeing other potential countries to manufacture its products. While China obviously continues to be a massive potential market for Nintendo (and a continuing relationship with Tencent to sell Switch hardware in mainland China remains vital to growth there), the ongoing trade war with the US has made companies nervous. While it's unlikely we'll see a sudden and total shift in production, it seems Nintendo is planning to hedge its bets and strike up relationships elsewhere as a backup should US/Chinese negotiations not resolve the current situation.

[via vg247.com, asia.nikkei.com]