Nintendo president Shuntaro Furukawa says the house of Mario wants to keep the Switch 2 price as is despite surging hardware component prices. That said, there's only so long that can continue before a change of heart is considered.
Speaking to investors following an earnings report, the suits at Nintendo take a question regarding their thoughts on hardware and software pricing. Everything is getting more expensive, so at what point does Nintendo factor price increases into their planning?
When it comes to hardware, Furukawa says that Nintendo's reliance on various partners for different parts creates a greater sense of vulnerability when things beyond its control go wrong.
"Currently, manufacturing costs are trending upward due to various external factors," he says. "Our basic thinking is that if costs rise by a moderate amount, we will work to keep sales prices unchanged through measures like improving production efficiency to absorb those increased costs, and by bearing the remaining costs ourselves, to the extent possible.
"However, considering the overall profitability of the business, if the impact over the mid-to-long term is such that we cannot absorb the costs through our own efforts, and we determine that it would be difficult to maintain a healthy profit structure, we will need to consider price revisions."
When it comes to software, Furukawa says the impact is more limited. Regardless, rising component prices do impact game cards, and "the situation is not necessarily favorable either."
"Our basic policy for software is to set prices that reflect the value of each title," he adds. "Instead of setting a uniform price, we consider and determine the price on an individual basis, taking the content of each software product into account."
As we reported last week, the Switch 2 price seems safe for now, as Nintendo reports it has enough memory in stock to weather the storm. Additionally, the cost of buying Nintendo's latest console was increased just earlier this year, so I imagine there's little rush or desire to do so again. Switch 2 sales may be down 37% year over year, though it's still outpacing the OG Switch and PS5 quite nicely.
I can see why a more expensive Switch 2 might be attractive to investors and, in theory, the bottom line, though you also have to consider that a lofty barrier to entry turns purchase intent from "I'll buy this now" to "I'll buy this when the price eventually goes down." Whenever that is, at this rate. As former PlayStation Shawn Layden says, "true innovation" in the industry right now is making a console cheaper, not boosting frames by however much.
