“We are now preparing to manufacture NX and hashing out details like the extent of automation.”
☆ NintendObs Event – Nintendo’s 2016 Annual General Meeting of Shareholders.
Question:
What can you tell us about your NX production plans? I’ve heard that labor costs in China for assembly workers have risen considerably lately. And there was news at the end of May that the Taiwanese contract manufacturing company Hon Hai was restructuring by replacing 50,000 workers with robots. Game systems have a life cycle of around five years, and the products designed five years ago both by your company and by other companies do not look like they could be easily made by robots. NX will probably come out next year, so its five-year life cycle takes us to around 2020. Production will likely be largely automated by then. Assuming that Nintendo will continue to be a fabless company that outsources production, what can you say about production trends and how will Nintendo address issues like cost and ease of manufacture?
Answer:
Hirokazu Shinshi (Director, General Manager of Manufacturing Division):
Labor costs in China have certainly risen steeply over the last ten years or so. You see some uptrend in labor costs in other ASEAN nations too, so it is not as if this is happening in only China. That said, the jump in China stands out.
There is some talk that the rising labor costs in China are leading to more automation. The word “automation” brings robots to mind, but we should see the trend for automation in China in the same context as Japan’s past efforts to automate its manufacturing sector. You bring up the matter of Hon Hai, but that is not about the factories that make Nintendo products. So, although I can’t really comment, Hon Hai is working hard to cut its costs, and one way is to progress with automation using robots. I see this as a cycle that puts workers to use in more productive ways, rather than something leading directly to layoffs. The circumstances in China support automation in factories to boost productivity and counter rising labor costs.
But regarding the manufacture of our products in this setting, let me just note that devices like ours, which are complicated and made in amounts that vary widely from month to month, do not lend themselves to the kind of automation that is easy to introduce for devices with simple structures, that are made in constant amounts. Are there more efficient ways of determining which processes to automate and how? Can automation deal better with changes? These are the kinds of questions we continue to address. We are in close communication with our partners who manufacture our products. We are now preparing to manufacture NX and hashing out details like the extent of automation. We hope to create the optimal production environment.
— The 76th Annual General Meeting of Shareholders
Source: Nintendo JP.
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