Nintendo is getting squeezed from both sides: memory prices are climbing, and investors are losing patience with a Switch 2 that is becoming more expensive to make just as tariffs and softer demand threaten launch momentum. The result is a stock that has fallen 45% from its peak in August last year, a brutal reminder that even beloved hardware brands cannot escape component inflation.
The problem is not unique to Nintendo. Sony has also taken a hit, with its shares down more than 30% since November, and its PlayStation 5 family depends on even pricier parts. Console makers have long relied on thin hardware margins and made the money back on games and services; that model gets shakier when the box itself starts getting harder to sell.
Switch 2 is selling better than Switch, but the math is uglier
Nintendo does still have one thing going for it: demand. Jefferies analysts estimate Switch 2 is selling 77% better than the original Switch at comparable points in its life cycle, and early software interest is real. ”Pokemon Pokopia” sold 2.2 million copies in its first four days, which is the kind of start hardware makers love to brag about.
But raw sales strength does not cancel out higher input costs. The original Switch sold 155 million units and generated 1.5 billion compatible game sales over its life, or 9.7 games per console. Switch 2 is only at 2.2 games per console so far, which is normal for a newer system, but it also means Nintendo needs a steady flow of hits to keep buyers engaged while prices rise around them.
A Nintendo Switch 2 price increase looks increasingly likely
Experts are already expecting Nintendo to lift the Switch 2 price in the second half of the year. For the US market, that would mean a jump from $450 to $500, and that kind of move is awkward for a company whose younger audience is usually more sensitive to price changes than the average console buyer.
- Switch 1 lifetime sales: 155 million units
- Compatible games sold: 1.5 billion
- Switch 2 sales pace versus Switch 1: 77% better on comparable timelines
- Expected US Switch 2 price: $450 to $500
Nintendo Direct may have to do some heavy lifting
Nintendo still has a possible escape hatch: upcoming software. The company is expected to show future games at its June Nintendo Direct event, and a strong lineup could soften the blow if hardware pricing rises again. There is also talk of a new Mario game this year, which would help, especially after the film-driven boost to that franchise’s visibility.
That may be enough to steady sentiment for now, but the bigger issue is structural: if memory shortages persist until 2028, as some estimates suggest, console makers will keep fighting the same battle. In that world, the winners are the companies with the strongest software pipelines; the losers are everyone trying to sell a more expensive box to a more cautious buyer.