Nintendo Plans to Boost Switch 2 Production to Combat Rising Memory Costs and Drive Software Sales

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Nintendo has announced plans to address the ongoing memory shortage by ramping up production of Switch 2 units.

The memory shortage has become a significant issue in the tech industry, with rising RAM prices driven by AI developments. This situation has prompted Valve to reconsider the pricing and release schedule for Steam Machines, while both Sony and Nintendo have acknowledged the potential for future price increases for their consoles, although neither is currently planning to raise prices.

In a recent Q&A following Nintendo’s financial results, president Shuntaro Furukawa was asked whether the company would prioritize selling as many Switch 2 consoles as possible to grow its install base or ensure that it doesn’t sell the hardware at a loss. Furukawa stated, “The current rise in memory prices is happening at a pace that exceeds our expectations. Generally, hardware profitability improves with economies of scale, and we aim to reduce costs through mass production of Nintendo Switch 2 units.”

Regarding the goal of avoiding hardware sales at a loss, he explained, “We focus on global profitability. There are various external factors, like exchange rate fluctuations, but we traditionally try to avoid selling individual units at a loss.”

Furukawa emphasized that “it’s not wise to be overly swayed by short-term trends,” highlighting the importance of the second and third years for the Nintendo Switch 2. He noted, “Expanding the hardware install base can significantly boost software sales. We will consider this in our business decisions and remain flexible with our options.” While a price increase isn’t off the table, it appears Nintendo is making efforts to keep the Switch 2’s price as stable as possible.

The launch of the PS6 may face delays due to AI production challenges, but that might not be such a bad thing.