Hold onto your gaming devices as the cost of the Nintendo Switch 2 is set to rise. Nintendo announced that starting September 1, the price of the Nintendo Switch 2 in Canada will go up to $679.99 Cdn from its current $629.99.
In Japan, the price of the Switch 2 will also see an increase to 59,980 yen from 49,980 yen on May 25. Nintendo explained that this decision was influenced by changes in market conditions and a consideration of the global business outlook.
The company’s president, Shuntaro Furukawa, attributed the price hike to higher component expenses and factors such as exchange rates. This move is part of Nintendo’s response to rising costs and challenges faced in the market.
Major Japanese exporters, including Nintendo and Sony, are dealing with higher costs due to factors like U.S. President Donald Trump’s tariff increases and the impact of the Iran conflict. Both companies are also feeling the strain of increasing memory chip prices, which are affecting the tech sector.
Memory chip prices have surged significantly, doubling in the first quarter alone and expected to rise by up to 63% in the current quarter. This spike is driven by high demand in AI data centers, impacting the supply chain for various devices like smartphones, laptops, and cars.
Nintendo anticipates an additional cost of approximately 100 billion yen ($874 million Cdn) in the current financial year due to higher component costs, especially in memory, and the effects of tariffs.
The decision to raise prices reflects the severity of the situation, with HSBC analyst Kazunori Ito noting that waiting for market conditions to improve is not a viable option. Despite the price adjustments, Nintendo expects profitability to remain stable compared to the previous financial year.
Nintendo reported a net profit of 424 billion yen ($3.7 billion Cdn) for the fiscal year ending in March, showing a significant increase from the previous year. Annual sales also saw a substantial rise, reaching 2.3 trillion yen ($20.1 billion Cdn), driven by continued demand for the Switch 2.
Looking ahead, Nintendo projects an 11% decline in profit for the fiscal year ending in March 2027, factoring in the planned price hikes. The company expects to sell 16.5 million Switch 2 units during this period, with a focus on software sales growth.
While the initial sales of game consoles tend to decline after launch, software sales typically continue to increase. Nintendo’s hybrid Switch 2, which functions as both a home console and a portable handheld, remains popular among consumers.
Nintendo plans to release more software titles for the Switch 2, including collaborations with other developers. Following the earnings announcement, Nintendo’s stock price rose by 3.6%.
Overall, the gaming industry continues to evolve, with companies like Nintendo adapting to market dynamics and consumer demands.
