Will The Switch 2 See A Price Hike? Nintendo President Offers A Clue
During a question and answer session to discuss Nintendo's latest earnings report, company president Shuntaro Furukawa was asked how rising component costs are affecting profits on the Switch 2, and what will happen once Nintendo depletes its current inventory. In other words, can we expect a price hike, as we've seen from Sony with the PlayStation, Microsoft with the Xbox Series X|S, and even Nintendo with its first-gen Switch handheld.
The good news is, it sounds like there are no imminent plans to raise the price of the Switch 2, which is selling like gangbusters—Nintendo's earning report highlights 10.36 million units sold in the first four months, ranking the Switch 2 as the fastest-selling console in history.
"We believe that we'll be able to maintain the current level of profitability for hardware for
the time being unless there are significant changes in external factors, such as a shift in tariff
assumptions, or other unexpected events," Furukawa said.
If you're looking at the glass as being half empty, Furukawa's response doesn't slam the door on a possible price hike. However, he goes on to state that while Nintendo is certainly cognizant rising costs on materials that go into the Switch 2, there are means of mitigating them "through ongoing mass production efforts."
"Therefore, currently we do not expect the recent rise in material costs to greatly impact profitability. We will continue our efforts to maintain the same level of profitability a we currently have," Furukawa added.
One thing to keep in mind is that Nintendo may have planned ahead to some extent. The Switch 2 launched at $449 for the standalone console and $499 for the Switch 2 + Mario Kart World bundle. Those price points are significantly higher than the first generation Switch, which debuted at $299, followed by an upgraded model with an OLED display and double the storage that launched at $349.
For the time being, Nintendo's pricing strategy is paying off, as reflected in its latest earnings.
"Hardware sales increased significantly in this half-year period due to the launch of Nintendo Switch 2. The fact that Nintendo Switch 2 has a higher individual unit price than Nintendo Switch also contributed to the increase in net sales, and our dedicated video game platform business sales increased by 119.7% year-on-year to 1,066.1 billion yen," Nintendo stated in its earnings report.
Another interesting nugget from Furukawa's Q&A session (PDF) is him pointing out a "significant gap" in the number of Switch 2 owners versus Switch 1 owners. Even though the Switch 2 is off to an unprecedented pace in console sales, the 10.36 million units sold still pales in comparison to the more than 150 million Switch 1 consoles in the wild.
"Given that fact, for now we expect to remain in a phase where it is primarily existing Nintendo
Switch owners who will purchase Nintendo Switch 2. But at the same time, we will work to
convey the appeal of Nintendo Switch 2 to new consumers through the release of software
titles and other means," Furukawa said (PDF).
That's all the more reason to hold firm on a price point that is working for Nintendo. Obviously the Switch 1 has been on the market for a much longer period of time, but the goal is to eventually build up the install base of Switch 2 owners to the same extent, or even better. That could be challenging if the price shoots up north of $500.
