Chip and memory squeeze shows up in gaming

A former Nintendo sales lead said Nintendo may have to raise the Switch 2’s price as inflation, tariffs and memory costs keep climbing. (nintendoreporters.com) Nintendo launched the Switch 2 in the United States on June 5, 2025 at $449.99, with a $499.99 bundle that included Mario Kart World. Nintendo said the system’s larger screen, new Joy-Con 2 controllers and faster processing were part of that launch package. (nintendo.com) The former sales lead, identified as Sean in coverage of a Kit & Krysta podcast appearance, said tariffs, stubborn inflation and tighter semiconductor and memory supply were all pushing against Nintendo’s margins. NintendoReporters said he argued Nintendo could delay a change, but not avoid those pressures indefinitely. (nintendoreporters.com) Memory is one of the costliest parts inside a modern game machine, and that market has tightened as cloud companies buy more chips for artificial intelligence servers. TrendForce said on March 31 that conventional dynamic random-access memory prices were expected to rise 58 percent to 63 percent quarter over quarter in the second quarter of 2026, while NAND flash prices were forecast to rise 70 percent to 75 percent. (trendforce.com) TrendForce also said suppliers were steering more capacity toward server products because those parts bring better margins. It said graphics memory supply for notebooks and gaming devices remained constrained, with prices expected to keep rising in the second quarter of 2026. (trendforce.com) Sony has already moved first on console pricing this year. On March 27, 2026, Sony said it would raise PlayStation 5 prices globally from April 2, including a United States price of $649.99 for the standard model and $599.99 for the Digital Edition, citing “continued pressures in the global economic landscape.” (blog.playstation.com) Nintendo’s own filings show why hardware makers try to protect margins even when unit sales are strong. In results published on August 1, 2025, Nintendo said the Switch 2 carried a lower profit margin than the original Switch and that its gross profit ratio fell to 32.3 percent in the quarter that included the launch. (nintendo.co.jp) Nintendo also told investors on May 8, 2025 that its outlook assumed United States tariff rates in effect on April 10, 2025 would stay in place through the fiscal year. That means tariff policy was already built into Nintendo’s planning before this latest debate over whether hardware prices can stay flat. (nintendo.co.jp) The Switch business is now large enough that even small component increases can ripple through Nintendo’s earnings. Nintendo’s investor relations site said the original Switch had sold 155.37 million units and the Switch 2 had sold 17.37 million units as of December 31, 2025. (nintendo.co.jp) Nintendo has not announced a new Switch 2 price. The pressure described by a former sales executive now lines up with what Sony has already done, what memory researchers are forecasting and what Nintendo’s own filings say about thinner hardware margins. (nintendoreporters.com)