Nintendo president Shuntaro Furukawa says the company is keeping a close eye on Switch 2’s profit margin as the increase in memory prices and ongoing tariffs remain an ongoing issue in the industry.
In an interview with Kyoto Shimbun (paywalled but read by VGC), Furukawa was asked what the challenges were regarding Switch 2’s lower profit margin than that of the original Switch.
“Hardware profitability depends on factors like component procurement conditions, cost reductions through mass production, and the impact of exchange rates and tariffs,” Furukawa said (via machine translation).
“It’s difficult to generalize. Fundamentally, we aim to address this by advancing component procurement over the medium to long term.”
Furukawa went on to note that the rapidly increasing cost of RAM – mainly attributed to AI data centres buying up huge quantities of it, making supplies scarce – is something that could become an issue if it continues.
“We procure from suppliers based on our medium- to long-term business plans, but the current memory market is very volatile,” he explained. “There is no immediate impact on earnings, but it is something we must monitor closely.”
When asked if it could increase its prices depending on its future procurement costs, Furukawa said that was hypothetical and he couldn’t comment.
Later in the interview, Furukawa was asked what impact the high tariffs placed on Japan by the US were having on the company.
Furukawa noted that at the start of its fiscal year Nintendo had projected a negative impact of several tens of billion yen as a result of the tariffs, and said it did see a corresponding impact in the first half of the year.
“While it’s difficult to accurately gauge the future impact, our basic policy is to recognize tariffs as a cost and pass them on to prices as much as possible, not just in the US,” he said.
“On the other hand, this is a crucial period for our game business as we promote the adoption of new hardware and maintain the momentum of our platforms. We are working on this while carefully considering the situation.”
Nintendo held fire on Switch 2 pre-orders in the US due to economic uncertainty in the region, before eventually announcing that while the console itself would not see a price increase at launch, some accessories would.
“Nintendo Switch 2 accessories will experience price adjustments from those announced on April 2 due to changes in market conditions,” it said at the time. “Other adjustments to the price of any Nintendo product are also possible in the future depending on market conditions.”
This came to pass in August, when Nintendo announced that it was increasing the price of the original Switch console in the US due to “market conditions”, increasing the price of Switch to $339 (from $299), Switch OLED to $399 (from $349) and a Switch Lite to $229 (from $199).
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