Nintendo Switch Won’t Get Price Increase ‘At This Stage’ Despite Higher Costs
Nintendo President Shuntaro Furukawa says the Nintendo Switch won’t get a price increase “at this point” despite the hardware’s higher production costs, because the company wants to “avoid making people pay “.
Speaking to Nikkei Asia, Furukawa said Nintendo has no plans to adjust the price of the Switch to “compensate for increased production and shipping costs”, and the comments follow Nintendo’s decision. Meta to raise the price of Meta Quest 2 by $100 because “the costs to manufacture and ship [Meta’s] products multiply. »
“We are not considering [a price increase] at this point, for two reasons,” Furukawa said. “In order to provide unique entertainment to a wide range of customers, we want to avoid overpricing people. Our competition is the variety of entertainment in the world, and we always think about pricing based on the value of the fun we provide.
“Our products also include software. Nintendo has sold over 100 million Switch units so far, and it’s important to maintain momentum in our overall business. Generally speaking, a weak yen makes domestic Switch sales less profitable.
Furukawa also shared that the Switch’s OLED model will continue to be the least cost-effective Switch, and it doesn’t help that costs have “increased for shipping not only by air, but also by sea.”
“We are thinking about what we can do,” Furukawa said. “The weak yen can be seen as an advantage for Nintendo, since such a large portion of our sales come from overseas, but our overseas promotion and personnel costs are also increasing. We are making more purchases of foreign currency stocks to counter this.”
The statements also come after Switch sales fell “by 23% year on year in volume during the April-June quarter amid shortages of semiconductors and other parts”. Nintendo expects a 29% decline in annual net profit in the fiscal year ending March 2023, even though it expects to sell 21 million Switch consoles.
Regarding the current shortage of semiconductors, Furukawa believes the situation will improve in the “second half of this summer”, but the future is still unclear and Nintendo is unable to give specific outlook for Switch sales beyond this fiscal year. .
For those hoping for a word on the unconfirmed but highly desired Switch Pro, Furukawa has doubled down on Nintendo’s commitment to focus on just three Switch models – the standard model, Switch Lite, and the OLED model. Obviously, things can change at any time, but Nintendo is staying the course for now.
“I can’t say specifically what’s missing,” Furukawa said. “Nintendo will continue to sell three [Switch] models: the standard model; the Switch Lite with reduced price, size and features; and the OLED model. We will work out the best strategy as we go. We are doing our best to source high quality products at an appropriate price for the next few years.”
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