Japanese gaming powerhouse Nintendo announced on Friday that it will raise the price of its Switch 2 console as memory‑chip costs climb, and projected a 27 percent decline in net profit for the fiscal year ending March 2027.
The company said the Switch 2 price in Japan will increase by 20 percent from 25 May, while the U.S. price will rise 11 percent to $499.99 on 1 September, and the European price will go up 6 percent to €499.99. Nintendo expects net profit to fall to 310 billion yen ($1.98 billion) on sales of 2.05 trillion yen, an 11.4 percent drop in revenue. Operating profit is forecast at 370 billion yen, well below the average analyst estimate of 480 billion yen, Bloomberg reported.
The outlook follows a strong finish to the previous fiscal year, when Nintendo posted a 52 percent surge in net profit to 424 billion yen on sales of 2.31 trillion yen. The company highlighted that the Switch 2 “got off to a good start” after its June launch and that global sales continued to climb, reaching 19.86 million units by March. Key titles such as “Pokemon Pokopia,” “Mario Kart World” and “Donkey Kong Bananza” contributed to the momentum.
Rising memory‑chip prices, driven by the artificial‑intelligence boom and compounded by supply disruptions linked to the Iran conflict, have pressured manufacturers of consoles, smartphones and other electronics. Sony, whose PlayStation 5 price was increased earlier, took a more optimistic tone, forecasting a 13 percent rise in income despite a decline in PS5 sales to 16 million units in the last fiscal year, down from 18.5 million the year before. Analysts note that Sony’s larger installed base of 92 million PS5 units and the upcoming release of “Grand Theft Auto VI” in November could help offset hardware weakness.
Industry commentators point out that Nintendo faces a tougher situation. Switch 2 buyers are considered “especially price sensitive,” and the initial game lineup is viewed as weaker than that of the original Switch. Gaming consultant Serkan Toto urged Nintendo to accelerate software development to sustain demand.
The price adjustments and profit warning underscore the broader impact of component cost inflation on the gaming sector. Nintendo’s next steps will likely focus on expanding its software portfolio and managing cost pressures while navigating a competitive market dominated by both legacy and emerging platforms.
