For a lot of people, the $450 price tag on the Nintendo Switch 2 is already a hard pill to swallow. But if it were up to Nintendo investors, that price would be much, much higher.
Bloomberg reports that investors are concerned that the Switch 2 is "deeply unprofitable." Shares of Nintendo are currently "on their worst run in a decade" despite the company releasing several successful titles, opening a theme park, and the box office success of The Super Mario Galaxy Movie. The Switch 2 also continues to sell at a faster rate than any other home console ever made. Despite this success, investors are concerned only that Switch 2 hardware is just too darn cheap to purchase.
Many now believe that Nintendo simply must raise prices when it reports earnings this Friday, to guard against escalating costs and appease an anxious investor community. Others worry about the impact on demand, though that may be short-lived, unlike the share price pressure.
Nintendo investors are concerned that the $450 Switch 2 is deeply unprofitable. US tech giants are buying up the world’s supply of key components like memory, while trade disruptions from the Middle East war are affecting the cost of shipping and even basic materials like plastics. Japanese peers like Capcom, Koei Tecmo and indeed Sony are also under pressure.
Some analysts suggest that even if Nintendo raised the price of the Switch 2 by $50 to $100, they would still be selling at a loss. In the past few months, Sony increased the price of the PlayStation 5 hardware and Microsoft increased the price of their Game Pass subscription and then lowered it, slightly, a short time later.
