Nintendo addresses Switch 2 price concerns amid rising component costs
The company says memory price spikes won’t impact hardware profitability—for now.
The question of every video game investor and analyst during the recent Nintendo earnings Q&A was whether Nintendo will have to raise the price of the Nintendo Switch 2. This concern stems from spiking memory prices fueled by an AI-driven global shortage that has seen RAM costs skyrocket and graphics cards face delays. Despite the market turmoil, Nintendo is keeping a cool head and focusing on long-term stability.
President Shuntaro Furukawa addressed these concerns , stating that the company is working to secure stable supplies through long-term discussions with business partners. “As a result, the recent rise in memory prices did not have a significant impact on hardware profitability in the third quarter. In addition, we do not expect any significant impact in the fourth quarter.”
Balancing profitability and player growth
While the immediate outlook is stable, Furukawa admitted that the rise in component prices “exceeds our expectations.” If these costs remain high through the next fiscal year and beyond, it could put pressure on the console’s margins. “If this rise in component prices lasts longer than expected and runs through the next fiscal year and beyond, it may put pressure on profitability. If the situation deteriorates significantly, we will carefully assess market trends and respond.” Nintendo’s philosophy remains centered on the player. Furukawa emphasized that the second and third years of a console’s life are crucial for building a large installed base, which eventually leads to greater software sales.
Ultimately, any future decision to adjust pricing will depend on a “comprehensive” look at the market environment and sales trends. With heavy hitters like Pokémon Legends: Z-A and rumors of a new 3D Mario on the horizon, Nintendo is betting that a strong library of games will keep the platform’s momentum going, even in a challenging economic climate.
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