Nintendo hikes Switch 2 price to $500 citing memory costs and tariffs

Nintendo has confirmed a $50 price increase for the Switch 2 console in the United States, bringing the retail price to $500. The Japanese company attributes this adjustment to rising costs associated with memory components and the impact of US tariffs. While the hike is smaller than the $150 increase seen recently for Sony's PlayStation 5, Nintendo acknowledges that its younger, more price-sensitive fan base may be affected by the change.

The pricing decision comes amidst a broader industry challenge involving global memory chip shortages. Nintendo noted that these market condition impacts are expected to persist in the medium to long term. Consequently, the company has issued a formal apology regarding the impact of these price revisions on customers and other stakeholders. The firm expects the cost pressures to continue influencing its financial outlook over the coming years.

Despite the hardware price adjustment, Nintendo reported a significant surge in its financial performance for the 2026 fiscal year. Revenue rose by 98.6 per cent to 2.3 trillion yen, equivalent to approximately $14.7 billion. This growth was largely driven by robust software sales, which reached 185.62 million units, and the commercial success of the Super Mario Galaxy movie, which grossed over $800 million in its first four weeks.

Looking ahead, the company forecasts a contraction in hardware demand for the upcoming fiscal year. Nintendo predicts it will ship 16.5 million Switch 2 units, a notable drop from the 19.86 million units shipped across the last three quarters of the previous fiscal year. This outlook contrasts with analyst expectations of over 20 million units, though the company maintains that the forecast represents a solid level of adoption for the console in its second year.

Operating profit is projected to rise slightly in the next fiscal year, buoyed by sustained software performance. Key software titles contributing to this strength include Mario Kart World, which sold 14.7 million units, and Pokemon Legends: Z-A, which moved 8.5 million units. Other notable releases include Donkey Kong Bananza, which achieved sales of 4.5 million units.

The financial report also highlights the contrast between revenue growth and cost pressures. Nintendo expects revenue to fall by nearly 11.4 per cent next year, while factoring in extra costs of about 100 billion yen due to rising component prices and tariff measures. This mirrors trends seen in other major corporations, such as Toyota, which are navigating periods of record revenue alongside profit contraction or significant cost pressures.