Nintendo will not adjust the Switch’s price point, despite the ongoing semiconductor shortage pushing up the cost of manufacturing.
In Nintendo’s most recent earnings report, it was revealed that the Switch has seen a 23% drop in hardware sales across the April-June quarter. This puts Nintendo’s profit forecast down 29% on its original expectations. The dip in Nintendo’s fortunes is tied to the continuing semiconductor shortage affecting every sector of the consumer electronics industry. Despite the rising cost of producing the popular console, Nintendo says it won’t move its price point to soothe the pain on its bottom line.
In an interview with Nikkei, Nintendo president Shuntaro Furukawa said he made the decision to avoid “pricing people out.”
“In order to offer unique entertainment to a wide range of customers, we want to avoid pricing people out,” Furukawa told Nikkei. “Our competition is the variety of entertainment in the world, and we always think about pricing in terms of the value of the fun we offer.”
He also went on to say that he believes the pain is extremely temporary. Holding on the price of the Switch makes sense because, to Furukawa, there’s no reason to panic. Furukawa says Nintendo currently anticipates improvements toward the end of the year, and that it still expects to sell 21 million units by that time. “Beyond that,” he says, “things are uncertain.”
“(The Nintendo Switch) is in its sixth year since its launch. All I can say is that we’ll try to keep up sales at the same pace. Having hit software also gives a boost to hardware,” Furukawa told Nikkei. ”We have a lineup of new games that will allow us to take a crack at meeting our sales forecast, including Splatoon 3 coming out in September and Pokémon Scarlet And Violet in November.”
The refreshed Switch OLED, at a higher price than the standard model, appeared to be bearing the brunt of the shortage. “For the time being, our OLED model will continue to be less profitable than our other models. Costs have undoubtedly increased for shipping not only by air, but also by sea. We’re thinking about what we can do.”
Nintendo’s decision to hold steady on pricing comes only weeks after Meta announced it would raise the price of its Quest 2 virtual reality headset in an effort to curb manufacturing expenditure. The jump, around a $100 on either model, was received poorly by those yet to invest in VR and with relief by those who’d already picked up a headset.
For Australian Nintendo fans looking to pick up a console closer to Christmas, this is a positive sign that stock will remain plentiful come November. For now, fans looking to pick up a Switch or official accessories in the near future should probably call their local retailer ahead of time.