Evidence shows that video game makers are pivoting away from China on a long-term basis, as the demand and downstream supply chains are disrupted amid the outbreak of the new coronavirus, said Chris Rogers, research analyst at Panjiva and S&P Global Market Intelligence.
“Due to the new coronavirus infection that is currently occurring, it is expected that production and shipment delays will be inevitable for peripheral devices such as the Nintendo Switch and Joy-Con manufactured in China for the Japanese domestic market,” said Japanese video game maker Nintendo.
In 2019, there had already been a downturn in US imports in the video game industry, with a 28.4% year-over-year drop. While in January this year, Panjiva data showed that shipments linked to Xbox were down 51.8%, and both Nintendo and Sony have shown similar declines (35.1% and 20.9%, respectively).
The chart segments US seaborne imports of video games by brand on a monthly and three-month basis. / Photo credit: Panjiva
China represented 87.9% of seaborne video game imports across all platforms in 2019 and 97.6% in 2018, according to Panjiva.
Among the three game brands, Microsoft’s Xbox is the most exposed to supplies from mainland China, which represented 95.1% of shipments linked to the brand in 2019, followed by Nintendo products with 90.1% of US seaborne shipments coming from the mainland. Sony’s PlayStation appears to be the least exposed, with 68.2% of shipments to the US linked to the brand coming from China.
As of February 11, there are 43,103 confirmed cases of the new illness around the world, with 1,018 deaths.
Editing by Jaclyn Teng
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