Nintendo President Shuntaro Furukawa stated that the company intends to maintain the current pricing for the Switch 2 despite rising component costs. The management plans to absorb moderate cost increases by improving production efficiency and internal cost management to avoid price hikes for consumers.
However, Furukawa noted that this strategy is not indefinite. If long-term cost pressures exceed the company's ability to absorb them and threaten healthy profit margins, Nintendo may be forced to adjust hardware prices. The company currently relies on various partners for components, making it vulnerable to external supply chain risks.
Regarding software, Nintendo will continue to set prices based on the value of each individual game rather than a flat rate. While rising component costs affect the production of physical game cartridges, the impact on software is considered limited. The company has sufficient memory chip reserves to handle current supply shortages.
The Switch 2 recently saw a 37% year-over-year decline in sales, yet its performance remains ahead of the original Switch and Sony PS5. Former PlayStation executive Shawn Layden suggested that the industry should focus on reducing console prices to the $300 level to drive innovation.
