Coronavirus has been devastating in Asia, but as of February 14, 2020, coronavirus has infected 60,000 and killed 1,000 all over the world. However, China, the origin of the virus, has borne the bulk of the human and economic cost.
It is too early to determine all the effects of coronavirus on the world economy but some projections estimate that the virus will cost the world at least 0.2% in economic growth. This may seem like a small number, but this translates to over $17 trillion in lost economic activity throughout the world.
This has already been seen in a drop in commodities prices such as crude oil and copper. China uses these raw materials to produce everything from cell phones to industrial equipment. Now we are beginning to see a direct impact on specific product lines such as Nintendo Switch.
What is coronavirus?
Coronavirus is a large family of viruses that includes rhinovirus (the virus that causes the common cold) and severe acute respiratory syndrome (SARS). In fact, it is entirely possible that you have had a cold caused by a coronavirus strain in the past.
However, the current strain of coronavirus spreading throughout the world was unknown before December 2019. Dubbed COVID-19 for now, this strain has been especially dangerous for many reasons:
- Because it is new, humans have no natural defenses against it
- It appears to be highly contagious. Not only does it spread through the air, but it can also survive on surfaces for up to nine days and may even be transmitted through plumbing just as SARS can
People infected with coronavirus exhibit typical cold symptoms including upper respiratory congestion. However, some will develop lower respiratory infections and pneumonia. Around 2% to 3% of people infected succumb to their illness though the actual mortality numbers won’t be official until the end of the current breakout
What does coronavirus have to do with Nintendo Switch?
Although Nintendo is a Japanese company, the Nintendo Switch game console is manufactured in China. The company has announced that the most recent version of the device, co-branded with the popular video game “Animal Crossing,” has been delayed due to coronavirus.
Animal Crossing is the most recent game to lead to a branded version of a game console. Past examples, such as Call of Duty and Star Wars, have performed well for Nintendo’s competitors. The current business model has been to produce co-branded game consoles in limited quantities and promote them as “special editions” of the gaming system. These products are brand-builders for both the console manufacturer and the game producer. In fact, according to Identity Works, over 90% of consumers keep a promotional product because it serves a useful purpose. Special edition game consoles serve a practical purpose since they can play any game, not just the promoted game.
Rather than a first-person shooter or role-playing game, Animal Crossing is a social simulator that involves more strategy than action. Talking to neighbors, decorating your home, and establishing a yard are just some of the many things you can do in the game. As a result, Animal Crossing provides a very different game experience than other bundles with special edition game consoles. It’s also aimed at a very different gaming audience. Instead of being aimed as the soda-drinking gamers we typically think of when it comes to video games, Animal Crossing has a wide following of young children and nostalgic adults alike. As such, the co-branded Nintendo Switch sold out in a matter of days.
The Animal Crossing bundle includes a themed game console and controllers. In the UK and Japan, the bundle also includes a code to download the newest version of the game, Animal Crossing: New Horizons, which is due to be released in March 2020. The U.S. bundle, however, does not include the game and Animal Crossing: New Horizons must be purchased separately.
The Animal Crossing Nintendo Switch was announced in early February 2020. Just a few days later, the company announced that pre-orders would be delayed due to coronavirus. Most retailers that began taking orders have suspended sales, frustrating fans of both Animal Crossing and Nintendo.
Why would coronavirus delay Nintendo Switch?
Coronavirus has had many ripple effects across the world that may have led to Nintendo’s decision. Here are some of the top factors that have resulted in the Switch’s delay:
- Travel restrictions. Concerns about travelers carrying the virus into new countries have led many countries to impose quarantine requirements and entry restrictions on travelers who originate from, or have passed through, certain areas where the virus is widespread.
- Fear of infection. In addition to travel restrictions on those who have traveled to or through infected areas, quarantine restrictions have also been imposed on passengers traveling on the same vessel. This is because coronavirus is highly contagious and can be transmitted through the air. Thus, someone infected with coronavirus can infect others on an airplane or cruise ship even with no direct contact.
- Shipping concerns. Coronavirus appears to be quite hardy even on non-organic surfaces like doorknobs, countertops, and light switches. There is concern that goods shipped from or through infected areas could be infected with coronavirus and this could be passed on to recipients who have neither been to infected areas nor been in direct contact with anyone from those areas.
- Labor issues. Many companies are ordering factory closures to limit the spread of the virus. Moreover, the Chinese government has restricted movement in China and many people have voluntarily limited public contact.
How long will the delay last?
Although Nintendo has not specified its reasons for delaying the Animal Crossing Nintendo Switch, the company appears to consider the delay as a temporary issue. For now, the company has only delayed product deliveries to Japan from its factories in China.
Expect Nintendo to provide an update to the length of the delay before March. The companion game, Animal Crossing: New Horizons, is set to be released in late March, so the company will need to update consumers in the UK and Japan markets so they know when they can use the download code that comes with the bundle.
Luckily, consumers in the U.S. market have not yet been affected by the delay. This is because consoles sold in the U.S. are assembled in Vietnam due to the tariffs imposed during the recent trade war. However, disruptions in China to the production of components that go into the Nintendo Switch could slow down production in Vietnam.
If the company experiences additional production disruptions or the effects of the coronavirus outbreak last more than a month, other markets may be affected. Similarly, if the coronavirus outbreak spreads to other countries where Nintendo has factories, such as Vietnam, other markets may be impacted.
The outbreak itself could last up to a year. The SARS outbreak, for comparison, lasted about eight months. Coronavirus is from the same family of viruses as SARS, but is substantially more contagious, according to reports so far. On the other hand, medical experts are relying on experience gained during the SARS outbreak to try to contain coronavirus.
For now, medical experts are waiting for infections to peak to try to predict when the outbreak will begin to wane. In the meantime, the primary focus of researchers is to learn as much as possible about the new strain and to develop a vaccine against it.
The world will see a measurable economic drag from coronavirus. Product launches, trade shows, and travel have all seen major setbacks from both the direct and indirect effects of the virus. Nintendo Switch’s Animal Crossing bundle is no exception. However, as doctors and scientists gain a greater understanding of the virus, the outbreak will eventually burn itself out and economic activity will resume.
