Nintendo may have launched the Switch 2 to record-breaking numbers. But the company is now facing pressure from a completely different side.

Investors reportedly want Nintendo to increase the price of the console. This potential decision might be driven by rising manufacturing costs, which continue to hurt profit margins.

According to a report from Bloomberg, Nintendo is allegedly selling the $449.99 Switch 2 at a loss globally. This scenario has taken a worse shape in Japan. The region-locked version of this console costs around ¥50,000 (which is roughly $318) in that country.

The report suggests that the current pricing strategy is becoming difficult to sustain amid ongoing supply chain issues. Needless to say, the rising memory prices driven by AI demand, and higher shipping costs linked to global trade disruptions have played a major role in this approach.

For five straight months, Nintendo's stock has also reportedly declined, which is its longest decline since 2016. As per analysts like Hideki Yasuda from Toyo Research Advice, the company’s shares could continue falling unless Nintendo improves profitability on hardware sales.

Now the burning question: how much is the company going to increase the price of the consoles? Some investors reportedly expect Nintendo to increase the Switch 2 price by $50 to $100. This clearly aligns with the recent market trends, like what PlayStation and Xbox have already done.

However, this price-hiking approach is not sitting right with everyone, and we are not talking about the fans. Wedbush Securities analyst Michael Pachter reportedly called the idea “foolish." He has warned that higher prices could hit consumer demands, especially when Switch 2 is in its early life cycle.

Now, it's all up to Nintendo on how it balances between shareholders and customers!

Nintendo already hinted that Switch 2 prices could change

Nintendo may not have officially announced the Switch 2 price hike. But the company has already taken some steps to potentially prepare the fans for what's coming next.

The prices of Switch 2 accessories have already been raised. Besides that, the company has introduced higher pricing for some physical games. It has also discontinued the $500 Mario Kart World Switch 2 bundle. Some analysts viewed these as indirect price adjustments.

Nintendo is also reportedly pushing digital software sales harder because of higher profit margins. Meanwhile, Sony recently raised PS5 and PS5 Pro prices globally. The PS5 Pro now sits at $899.99 in the United States. So, the Switch 2 price hike is quite likely.

Now all eyes will be on Nintendo when it hosts its next financial earnings report on Friday, May 8.

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Written by

Nilendu Brahma

Edited by

Yask Kotak