Nintendo president: Switch 2 price increases due to war on Iran and AI-driven memory crisis
Nintendo president Shuntaro Furukawa has explained the decision to increase the price of Switch 2 hardware after less than a year on shelves was made to maintain "a healthy earnings structure" across the company.
The Switch 2 has already sold almost 20 million units worldwide—vastly exceeding Nintendo's initial estimates of 15 million sales across FY26. Those who have yet to purchase the console, however, will soon need to splash more cash in key markets such as Japan, Canada, Europe, and the United States.
According to Furukawa, that's because Nintendo must offset what it views as long-term issues such as the rising cost of key components (which as Bloomberg notes is driven by rampant investment in AI data centers) and surging oil prices resulting from the US-Israeli war on Iran (via The BBC).
"If the increase in costs were seen as something temporary that would subside relatively soon, then we could have pursued other options, such as working to improve productivity and expand the installed base while maintaining hardware prices," said Furukawa during an earnings Q&A.
"Unfortunately, the recent surge in memory and other component prices, and the changes in the market environment, including trends in the foreign exchange market and the price of oil, are all factors that we anticipate will continue over the medium to long term. As a result, we felt that the profitability of our hardware would suffer significantly if we maintained our existing pricing, potentially impacting our business operations over this time frame. For the sustained growth of our dedicated video game platform business, it is important to maintain a healthy earnings structure for our overall business."
Furukawa said hardware price revisions differ from region-to-region because each market is impacted to a different extent. He declined to discuss how the price hike might impact Nintendo Switch 2 sales, but acknowledged the move "raises the barrier for entry" to a certain extent.
Moving forward, he explained Nintendo will attempt to maintain console sales with the release of enticing software—citing the positive impact of titles such as Switch 2 exclusive Pokémon Pokopia, which sold 4 million units worldwide in five weeks, as an example of how major releases can bolster hardware sell-through.
"The way that Pokémon Pokopia has contributed to hardware sales reaffirms our belief that the availability of software that people want to play is a key factor supporting the transition to Nintendo Switch 2," he added. "Going forward, we have many new titles for Nintendo Switch 2 prepared, and we will carefully convey the appeal of each title to encourage people to transition to Nintendo Switch 2 at their own pace."
Although there could be challenges ahead for Nintendo as the Switch 2 enters its second fiscal year, Furukawa stressed that initial adoption of the console was "extremely fast" compared to its predecessor—even accounting for weaker-than-expected holiday sales in markets like the United States and Europe.
"For the current fiscal year, we've set the initial sales forecast at 16.5 million units," said Furukawa. "This takes into account the current sales momentum, as well as the sales performance seen in the second year of our past dedicated video game systems. As mentioned in our financial results explanatory material, the pace of adoption of Nintendo Switch 2 is extremely fast even when compared to Nintendo Switch, and we do not see any particular concerns about its momentum at this time."
