Nintendo just pulled off one of the most successful console launches in gaming history — and then apologized to its customers. On Friday, the Tokyo-based company announced that the Switch 2 will get more expensive almost everywhere it is sold. In the United States, the price will rise from $449.99 to $499.99 starting in September. In Japan, the locally exclusive version will jump from ¥49,980 to ¥59,980, roughly $382. After shipping close to 20 million units in the year ending in March, Nintendo now expects to ship just 16.5 million Switch 2 consoles over the next 12 months — a forecast analysts described as underwhelming.
What went wrong? Nothing, really, on the demand side. Gamers still want the console. The squeeze is coming from inside the supply chain. Nintendo, along with rivals such as Sony, is being battered by the soaring cost of memory chips, which have spiked because data-center operators are buying up enormous quantities of them to power the global build-out of artificial intelligence. The same chips that go into a Switch 2 also go into the servers training large language models — and the AI buyers have deeper pockets.
The damage shows up across Nintendo's books. The company reported annual profits of ¥360.1bn, missing analyst estimates closer to ¥400bn, and predicted profits of ¥570bn for the year ending March 2027. That projection assumes roughly ¥100bn of additional pain from rising component prices — particularly memory — and from US tariff measures. Nintendo's leadership called those assumptions 'extremely conservative,' a hint they expect to outperform. Investors weren't reassured: the stock has dropped about 45% from its August peak, including a 3.6% slide on the day of the announcement.
Here's the part most people miss. Consoles historically get *cheaper* over their lifecycle, not more expensive. Nintendo raising the price barely a year into the Switch 2's run is unusual, and it signals something bigger than one company's accounting. The AI boom is no longer just a Wall Street story or a Silicon Valley story — it is starting to bleed into the prices of ordinary consumer goods. Sony has been pressured by the same memory-cost dynamics for the PlayStation 5, and analyst David Gibson at MST Financial estimates that planned spending on a PS5 successor could reach ¥40bn. Nintendo is arguably more exposed than Sony, because it sells to a younger, more price-sensitive audience that may balk at a $50 hike on a device families buy for kids.
Nintendo is betting that brand loyalty wins. Mario, Zelda, Pokémon, and a freshly announced Star Fox remake are meant to keep the audience locked in even as the sticker price climbs. Whether that works depends on a question no one can fully answer yet: how much will families pay to stay inside the Nintendo ecosystem when every other piece of technology in their lives is also getting more expensive? The Switch 2's second year will be a real-world experiment in pricing power — and a preview of how the AI era reshapes the cost of the everyday gadgets that have nothing, on the surface, to do with AI at all.
Source: https://www.ft.com/content/nintendo-switch-2-price-rise
Nintendo just sold almost 20 million Switch 2 consoles in a year — and still had to apologize and raise prices. The villain isn't greed; it's a global memory-chip shortage.
Nintendo is hiking the price of its hit Switch 2 console worldwide, with the US version jumping $50 to $499.99 and the Japan-only edition climbing from ¥49,980 to ¥59,980 (about $382). The increases kick in starting in September.
The company also slashed its sales forecast: after shipping nearly 20 million Switch 2s in its first year, it now expects to ship just 16.5 million over the next 12 months. Analysts called the forecast underwhelming, and Nintendo's annual profit forecast of ¥360.1bn missed Wall Street estimates of around ¥400bn.
This isn't a story about Nintendo doing badly — the Switch 2 launch was a smash. It's a story about a hardware company getting squeezed between two forces it can't control: the price of its raw materials and the politics of trade.
If you've been saving for a Switch 2 — or a new laptop, phone, or graphics card — this is your first taste of how the AI build-out hits ordinary buyers. Data centers gobbling up memory chips means less supply for everything else, and prices ripple outward. The same dynamic will shape what your generation pays for tech, from college laptops to the first car you buy with built-in AI features.
Nintendo's stock has fallen sharply from its August peak, and the company is now exposed to the same supply-chain physics that crushed gadget makers during the 2021 chip shortage — only this time the rival buyer isn't carmakers, it's hyperscale AI. Watch for two second-order effects: rivals like Sony delaying their next-gen consoles to dodge the memory crunch, and game publishers releasing fewer big-budget titles if the installed base of consoles grows more slowly than planned. Nintendo is betting Mario and Zelda are strong enough to absorb a $50 sticker shock. We're about to find out.