Nintendo announced Friday that net profit for the year to next March will fall by 27 percent to 310 billion yen ($1.98 billion), citing rising memory chip costs. The Japanese company will raise the price of its Switch 2 console by 20 percent in Japan starting May 25, by 11 percent to $499.99 in the United States from September 1, and by six percent to 499.99 euros in Europe. Sales are expected to drop 11.4 percent to 2.05 trillion yen, with operating profit forecast at 370 billion yen, below the 480 billion yen average analyst estimate.
The company sold 19.86 million Switch 2 units by March, driven by games such as "Pokemon Pokopia", "Mario Kart World" and "Donkey Kong Bananza". "Nintendo Switch 2 got off to a good start following its launch in June and global sales continued to grow after that," the company said. Last year, net profit was 424 billion yen on sales of 2.31 trillion yen.
Memory chip price increases, fueled by demand from artificial intelligence and supply disruptions linked to the Iran war, are affecting console makers. Sony reported selling 16 million PlayStation5 units in the past fiscal year, down from 18.5 million previously, and projects a 13-percent rise in income for the coming year. Sony forecasts higher game division profits by March 2027 despite falling hardware sales, attributing strength to software and ecosystem engagement. Analysts expect "Grand Theft Auto VI", launching in November, to boost PlayStation sales.
Nintendo is raising Switch 2 prices while admitting its first-year game lineup is weaker than the original's, risking backlash from price-sensitive buyers. The 27 percent profit drop forecast undermines claims of strong post-launch momentum. Charging more for less compelling content suggests consumers may question the value. This could slow adoption in markets where affordability shapes buying decisions.
Editorial note: AI-assisted opinion, not established fact. Full disclaimer →
