Among the three giants of consoles, Nintendo is the only one that has not yet raised the price of this generation’s flagship game console. How long can it maintain the Switch 2's initial suggested retail price of $450? A former Nintendo sales executive believes that console price increases are inevitable, and the Trump administration's military actions against Iran will only further accelerate this process.
The former employee, who only identified himself as "Sean" to protect his privacy, told fellow former Nintendo employees Kit Ellis and Krista Young on a recent podcast: "Unfortunately, I think the price of hardware is bound to go up eventually. I think Nintendo has the ability, and it seems like it right now. It is indeed taking relevant measures to try to alleviate the pressure of price increases, but at the same time, I think, if my interpretation is correct, Nintendo’s recent actions on the software side are also to make it easier for players to accept subsequent hardware price increases.” He was referring to Nintendo’s recent announcement on the future Switch. 2The digital version of the game will be priced lower than the physical version.
He believes that this is one of Nintendo's measures to compensate for player experience - after all, for everyone up and down the industry chain, the cost of this generation of consoles has already risen. The core drivers of price increase pressure are still tariffs (Nintendo is suing the Trump administration over tariffs) and the shortage of memory and other core computer components caused by the AI boom.
"The inflation problem has been plaguing the industry for quite some time." Sean continued, "Tariffs are a new trouble in the near future, and they will not disappear in the short term. The massive chip demand brought by the AI industry is driving memory prices to continue to rise." But he added that the relevant actions against Iran have made the situation worse. The problem is not just that rising oil prices have pushed up the cost of transporting goods, but that supply chains of key resources needed to make parts have also been hit.
He said: "Helium is a by-product of oil extraction and an indispensable and irreplaceable core raw material in semiconductor manufacturing, which means that hardware manufacturing costs will further rise. At the same time, helium is also an irreplaceable and necessary material in the silicon wafer production process, which means that for Nintendo, which needs to produce game cartridges, related costs are also continuing to rise."
Nintendo can try to absorb part of the cost pressure through other revenue channels, including toys, IP licensing business, as well as movies, theme parks and other sectors. But Sean believes that there are currently too many unfavorable economic factors stacked up for Nintendo to survive alone.
"I think it is inevitable that Nintendo will see its first price increase after the launch of the console." Sean said, "You know, we have experienced the ups and downs and changes of many economic cycles with Nintendo, but this time the situation is particularly special. There are too many external forces forcing Nintendo to respond. This situation is something it has most likely never experienced in the past and is completely unaccustomed to."