Nintendo Remains Unconcerned About RAM Shortage Impacting Switch 2, For Now
During the recent earnings Q&A, a hot topic among investors and analysts was whether Nintendo would raise the price of the Switch 2 due to soaring memory costs linked to AI-driven shortages. With RAM prices skyrocketing and graphics card delays becoming common, Nintendo is maintaining a level-headed approach amid the chaos.
President Shuntaro Furukawa stated, “We are working to secure stable supplies of memory components by holding discussions from a long-term perspective with our business partners. As a result, the recent rise in memory prices did not have a significant impact on hardware profitability in the third quarter. We also do not expect any major effects in the fourth quarter.”
He added, “However, if this rise in component prices persists longer than anticipated and extends into the next fiscal year and beyond, it may pressure profitability. If the situation worsens significantly, we will carefully assess market trends and respond accordingly.” Consequently, Nintendo confirmed that no decision has been made regarding a price increase for the $450 Switch 2, but any future adjustments will consider factors like the platform’s installed base, sales trends, and the overall market environment.
Despite this reassurance, Q&A participants pressed Furukawa for more details. The company acknowledged that the recent surge in component prices “exceeds our expectations,” but noted that it has been stockpiling inventory and securing long-term agreements to mitigate the impact. Even if prices continue to rise into the summer, Nintendo can delay any difficult pricing decisions for a while longer, though not indefinitely.
When it comes to prioritizing profitability versus expanding the hardware’s install base, Furukawa remarked, “It is difficult to predict the changes in the external environment that are currently taking place, but I think it is not an appropriate approach to be excessively influenced by short-term trends. The second and third years for Nintendo Switch 2 are very important, and if we can expand the hardware installed base, we can use that as a basis to greatly expand software sales.”
It certainly seems like Nintendo is committed to avoiding a $500 price tag for the Switch 2 within the next year. However, if sales momentum accelerates following the announcement of new titles like a 3D Mario, Legend of Zelda, or the highly anticipated Gen 10 Pokémon games, they might find themselves in a position to make different choices. For now, Nintendo is taking its time before committing to any particular strategy.
With the unpredictable nature of the AI bubble, potential new tariffs affecting U.S. consumers, and the possibility of an unexpected recession in key markets, forecasting the future is as challenging as trying to predict Nintendo’s next move.
