The coronavirus outbreak is beginning to make serious ripples in the realm of technology manufacturing. A significant proportion of gaming-related hardware is manufactured in China, the effective ground zero for the viral outbreak.
It now looks as if the launch of Microsoft’s Xbox Series X and Sony’s PlayStation 5 could well be affected by the quarantine measures in place for the coronavirus.
"The video game sector is currently manufacturing, or beginning to, a once-in-several-years' product generation change for the 2020 holiday season," wrote investment bank Jefferies Group this week. "If company shutdowns exceed a month or so, game schedules will be delayed. New consoles may likewise suffer supply issues from a prolonged disruption, ahead of their Fall 2020 planned launches."
Employees at Foxconn are being quarantined and this will affect the manufacturing giant’s production capacities. Foxconn is one of the largest electronics contract manufacturing companies in the world and will likely be heavily involved with the production of the next-gen consoles. Apple has already warned the launch of the next iPhone could be delayed due to the quarantine.
Nintendo has also already confirmed the coronavirus is affecting Nintendo Switch supplies in Japan. Pre-orders for the Animal Crossing special edition Switch have been postponed to an undisclosed date.The issue is exacerbated because the Switch completely sold out in territories around the world over the holiday period, leaving precious few consoles in the supply channel.
"We can confirm that the manufacturing of some Nintendo products for the Japanese market has been delayed due to the impact of 2019-nCoV coronavirus outbreak," said Nintendo in a statement.
"Nintendo does not anticipate a significant impact on our broader global supply chain for systems and accessories at this time, and product sales in North America and Europe, including pre-orders, are not affected. We would like to express our concern and support for all those affected by the coronavirus during this challenging time."
For Sony and Microsoft, if there are any supply line issues with the next-gen consoles, the ramifications could be huge. Any delays to Foxconn’s current manufacturing contracts will surely have knock-on effects for the consoles.
While we’re dealing with a lot of intangibles here, this could ultimately mean either a delay for the next-gen consoles or constrained supplies at launch. The release pipeline is probably already locked in, with both first and third-party publishers planning around that big holiday launch. It’s doubtful that any sort of production of the Xbox Series X or PS5 is underway just yet, but there will be a significant ramp in the months ahead.