Key Highlights:
- The rise in DRAM and RAM prices are starting to affect Nintendo now.
- We could see a hike in the pricing of the Nintendo Switch 2.
- Nintendo might absorb some of the pricing increase, but it will not be enough.
The DRAM price surge has started to trickle down onto consoles, having affected PC RAM pricing earlier. Nintendo in particular seems to be having issues sourcing DRAM for its Nintendo Switch 2 console.
PCs were affected by the memory shortage way earlier, as RAM prices saw a tripling in their prices within 2 months of going on sale previously. It was only natural that this would trickle down onto other consumer electronics as well.
With a shortage in parts, we could see an eventual price bump for the console, as companies offload the cost onto the consumers. Here’s what we could expect, and what could realistically happen.
Nintendo Having Issues Procuring DRAM, It’s Claimed
As per a recent report from Techpowerup, Nintendo is already running into issues procuring both DRAM and NAND modules for its Nintendo Switch 2 console, for its RAM and storage components respectively.
According to the report, Nintendo sees around an 8% rise in the price of 256 GB NAND flash modules, while the 12 GB LPDDR5X module sees a massive increase of about 41% in its pricing.
In turn, these price increases affect the production of every Switch 2 unit, which means that Nintendo is currently operating at a much lower profit margin than usual. As is the case with most consoles, the Nintendo Switch 2 already had thin profit margins to begin with, and this surge will affect consumers negatively.
Consoles always sell their hardware at a lower profit margin (or even at a loss), opting to recoup costs by offering games for players to purchase from their platform over time. This makes an already tricky situation even more precarious to deal with.
How This Could (Or Could Not) Affect Nintendo’s Pricing Strategy
Historically, Nintendo has been known to take and absorb some of the damage into itself, choosing to not inflate prices and remain in good standing with its player base, something which is very much appreciated.
There does exist a chance that Nintendo will be able to take most of the trauma here, and sell the Switch 2 at near stock prices, but that seems quite unlikely if we’re being really honest here.
After all, Nintendo did recently cut down its profit forecast by a wide margin, up to the fiscal year ending in March 2025. While much of this can be attributed to the transition period between the last gen Switch and current gen Switch 2, the memory shortage could take things in a worse turn.
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Maintaining retail prices is going to be exceedingly difficult as manufacturers move into investing into AI workloads over consumer level hardware. We’ve even seen large scale manufacturers such as Crucial being killed off by their parent companies as they venture into more lucrative (but short term) prospects.
There is only so much Nintendo can absorb on its own, and the DRAM situation is growing exceedingly worse from now on. The price increase will be carried on over to the consumers, similar to what we’ve seen happening to PC hardware.
That being said, Nintendo will likely waive off some of the price increase on their own, and we could see a compromise of sorts in play here. Expect the Switch 2 to get pricier, but not by a whole lot (I’d wager between $50 to $100).
This does set a bad precedent for the future though, as everyone will likely follow suit and increase prices as well.
