Japanese gaming powerhouse Nintendo announced on Friday that it will raise the price of its Switch 2 console in response to soaring memory‑chip costs, projecting a 27 percent decline in net profit for the fiscal year ending March 2027.
The price increase will take effect on May 25 in Japan, where the Switch 2 will be 20 percent more expensive, and on September 1 in the United States and Europe, where the console will rise to $499.99 and €499.99 respectively – an 11 percent jump in the U.S. and a six‑percent increase in Europe.
Nintendo expects net profit to fall to ¥310 billion ($1.98 billion) on sales of ¥2.05 trillion, an 11.4 percent drop in revenue. Operating profit is forecast at ¥370 billion, well below analysts’ average estimate of ¥480 billion, according to Bloomberg. The company’s profit surged 52 percent to ¥424 billion in the previous fiscal year on sales of ¥2.31 trillion.
Since its launch in June, Nintendo reported that the Switch 2 sold 19.86 million units, supported by titles such as “Pokemon Pokopia,” “Mario Kart World,” and “Donkey Kong Bananza.” However, the firm warned that Switch 2 buyers are particularly price‑sensitive and that the initial software lineup is weaker than that of its predecessor.
The price hikes reflect a broader industry squeeze from rising memory‑chip prices, driven by heightened demand for artificial‑intelligence applications and supply disruptions linked to the conflict in Iran. The same cost pressure has affected Sony, whose PlayStation 5 price was raised earlier this year. Sony disclosed sales of 16 million PS5 units in its most recent fiscal year, down from 18.5 million the year before, yet it anticipates a 13 percent rise in income despite falling hardware sales.
Analysts note that Sony’s more mature PS5 cycle and its focus on high‑margin software give it a buffer against component cost spikes. The company also expects a boost from the upcoming release of “Grand Theft Auto VI” in November, which is likely to drive additional console sales.
Nintendo’s situation is comparatively tougher. With the Switch 2’s higher price and a slimmer launch‑title slate, the company must accelerate software development to sustain demand. The forthcoming fiscal results will reveal how effectively Nintendo can offset the hardware cost increase with stronger software revenue.
The developments underscore the growing impact of semiconductor pricing on the console market and suggest that both Nintendo and Sony will need to adjust their strategies to maintain profitability in an environment of constrained component supply.
