Hold onto your gaming devices – the cost of the Nintendo Switch 2 is set to rise. Nintendo announced that the price of the Nintendo Switch 2 in Canada will go up to $679.99 Cdn starting September 1, up from its current price of $629.99.
The price hike is part of Nintendo’s global strategy, with Japan seeing an increase in the Switch 2 price to 59,980 yen from 49,980 yen, effective May 25. Nintendo cited changes in market conditions and a holistic review of its business outlook as reasons for the adjustment.
Shuntaro Furukawa, the president of Nintendo, explained that the decision to raise prices was influenced by higher component costs and external factors like exchange rates. This move aligns with the broader trend affecting major Japanese exporters due to increased costs exacerbated by global events like tariff hikes and the situation in Iran.
Both Nintendo and Sony are facing challenges related to the surging prices of memory chips. The escalating costs are attributed to the AI boom, which is straining chip supply and causing disruptions across the tech industry. Memory chip prices have doubled in the first quarter alone and are expected to rise by up to 63% in the current quarter, impacting various sectors such as smartphones, laptops, and automobiles.
Nintendo anticipates that the rise in component costs, particularly memory, and the effects of tariffs will add approximately 100 billion yen ($874 million Cdn) to its expenses this fiscal year. Analysts suggest that the severity of the cost increase compelled Nintendo to implement the price hike, signaling a challenging market environment with limited prospects for cost relief in the near future.
Despite the price adjustments, Nintendo remains optimistic about the demand for the Switch 2, which contributed to a significant net profit increase in the previous fiscal year. Annual sales surged by 99% as the popularity of the Switch 2 remained strong, while sales for the first-generation Switch declined.
Looking ahead, Nintendo projects a decline in profit for the upcoming fiscal year, considering the planned price increases. The company expects to sell 16.5 million Switch 2 units in the fiscal year through March 2027, with software sales forecasted to continue growing. Nintendo also plans to introduce more software titles for the Switch 2, including collaborations with external developers.
Following the earnings announcement, Nintendo’s stock price experienced a 3.6% increase. The company’s performance reflects the ongoing demand for the Switch 2 and its strategic initiatives to address market challenges and enhance its product offerings.