Hold onto your gaming devices, as the cost of the Nintendo Switch 2 is set to rise. Beginning September 1, the price of the Nintendo Switch 2 in Canada will climb to $679.99 Cdn from the current rate of $629.99, according to a recent announcement by Nintendo. Similarly, the price hike in Japan will see the cost of the Switch 2 increase to 59,980 yen from 49,980 yen on May 25. The company attributed these adjustments to changing market conditions and a comprehensive evaluation of the global business landscape.
Nintendo’s decision was influenced by various factors, including rising component expenses and exchange rate fluctuations, as stated by company president Shuntaro Furukawa. The impact of increased tariffs, particularly due to challenges like U.S. President Donald Trump’s tariff policies, has affected major Japanese exporters like Nintendo and Sony. Both companies are grappling with escalating memory chip prices, driven by the surge in demand for artificial intelligence applications, which in turn has strained chip supply chains and caused disruptions across the technology sector.
Memory chip prices have surged, doubling in the first quarter and forecasted to rise by up to 63% in the current quarter due to heightened demand for AI data centers. Nintendo anticipates an additional cost of approximately 100 billion yen ($874 million Cdn) in the current financial year due to higher component costs and tariffs.
The decision to raise prices reflects the severity of the memory cost increases, indicating that internal absorption of these costs was no longer sustainable. Nintendo foresees that market conditions are unlikely to ease in the foreseeable future, prompting the need for immediate action.
Despite the price adjustments, Nintendo expects profitability to remain relatively stable compared to the previous financial year. The company reported a net profit of 424 billion yen ($3.7 billion Cdn) for the fiscal year ending in March, a significant increase from the previous year. Annual sales also saw a notable rise, reaching 2.3 trillion yen ($20.1 billion Cdn), driven by sustained demand for the Switch 2, although sales of the first-generation Switch declined.
Looking ahead, Nintendo projects an 11% decrease in profit for the fiscal year ending in March 2027, estimating sales of 16.5 million Switch 2 units and continued growth in software sales. The company remains optimistic about the Switch 2’s performance and plans to introduce more software titles from various developers.
Following the earnings announcement, Nintendo’s stock price surged by 3.6%. The gaming industry typically experiences strong initial sales following a console launch, with subsequent declines in hardware sales but continued growth in software offerings, a trend that Nintendo expects to follow with the Switch 2.
