Investors Want a Nintendo Switch 2 Price Hike Even Though Holiday Console Sales Disappointed

Nintendo is reportedly facing pressure from investors to raise the price of the Switch 2 console, eleven months after the system’s June 2025 launch and on top of a holiday season that already underperformed expectations badly enough to force a production cut.

Per a Bloomberg report published Wednesday, Nintendo is selling each Switch 2 unit at a loss because of elevated DRAM memory chip costs, shipping expenses, and other component pricing. The DRAM cost spike is largely driven by AI data center demand, which has consumed memory chip supply at a rate the consumer electronics industry can’t match. Nintendo’s stock has fallen for five straight months, its worst streak in a decade, and the pricing question is expected to dominate Friday’s quarterly earnings call.

Friday’s call comes against a complicated backdrop. The Switch 2 launched strong in June 2025 and shipped 17 million units globally by the end of April 2026, which is technically the fastest start in Nintendo’s history. But US holiday sales were down 35% compared to the original Switch’s 2017 holiday performance. Nintendo cut planned Switch 2 production by 33% for the current quarter back in March, dropping from six million units to four million.

It’s a more complicated story than the launch numbers suggest.

TL;DR

• Nintendo is reportedly selling Switch 2 hardware at a loss because of elevated DRAM, shipping, and component costs, per Bloomberg.
• US holiday sales were down 35% compared to the original Switch’s 2017 holiday season. UK was down 16%. France was down over 30%.
• Nintendo cut planned Switch 2 production by 33% in March, citing slower-than-expected consumer demand.
• The killer-app problem is real. Holiday lineup was Kirby Air Riders and Metroid Prime 4: Beyond, neither of which moved hardware the way Mario Kart 8 and Breath of the Wild did for the original Switch in 2017.
• The PS5 disc edition and Xbox Series X are now $649.99. Switch 2 at $449.99 holds a $200 advantage that investors apparently want narrowed.
• Friday’s earnings call is when Nintendo’s actual answer comes out.

The Holiday Sales Reality

The Switch 2’s launch was real. 3.5 million units in four days. 17 million-plus by April 2026. That’s the fastest hardware launch in Nintendo’s history.

The holiday quarter is where the picture got complicated. According to The Game Business and confirmed by Circana data, US Switch 2 sales were down approximately 35% from November to December 2025 compared to the original Switch’s same period in 2017. November 2025 was the worst month for video game hardware sales in the US since 1995. The UK was down 16%. France, normally one of Nintendo’s stronger European markets, was down over 30%. Even Japan, where the launch was strongest, was down about 5.5% compared to the original Switch’s 2017 holiday.

Nintendo cut Switch 2 production by a third in March, dropping the planned six million units for the current quarter to four million. Bloomberg’s sources explicitly attributed the cut to slower consumer demand rather than component costs. President Shuntaro Furukawa acknowledged on the February 3 earnings call that overseas sales were somewhat weaker than expected.

Analyst Amir Anvarzadeh of Asymmetric Advisors called the holiday shortfall awful news and pointed to the software lineup as the issue, telling Bloomberg the lineup had been poor, at least until most recently with Pokémon showing some hope.

The Pokémon reference is Pokémon Pokopia, which has been the brightest software spot of the Switch 2’s first year and is the title currently driving software attach rates. But it dropped after the holiday damage was already done.

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The Killer-App Problem

Nintendo’s hardware launches historically succeed when the launch software lineup includes a system-seller. The original Switch shipped in March 2017 with The Legend of Zelda: Breath of the Wild, which ended up as one of the most acclaimed games of the decade. Mario Kart 8 Deluxe arrived a month later and became the best-selling game in the franchise’s history. Super Mario Odyssey dropped in October. The first holiday season had three certified system-sellers in the launch window.

The Switch 2’s first holiday lineup was Kirby Air Riders and Metroid Prime 4: Beyond. Kirby Air Riders performed well in Japan but didn’t carry the broader Western audience the way Nintendo’s bigger franchises do. Metroid Prime 4: Beyond received mixed reception after seven years in development, with several reviewers and players describing it as a disappointment relative to the bar set by the original Metroid Prime trilogy. The launch window also included Mario Kart World, but reception there was more mixed than Nintendo’s bigger Mario Kart releases historically receive.

Nintendo Life‘s comment threads on the holiday-sales reports are full of buyer remorse from people who picked up the Switch 2 expecting the same Year One software pace the original Switch delivered and didn’t get it. No must-have game came up repeatedly. I bought one for Metroid Prime 4 and it was the biggest disappointment. The pattern is consistent across markets.

The current generation of console buyers is older, more price-sensitive, and less impulse-driven than the audience Nintendo built the original Switch on. This audience needs a reason to upgrade, and Mario Kart 8 Deluxe still being playable on the original Switch is real competition for the new hardware.

The killer-app problem may resolve itself in 2026. The next Animal Crossing is rumored. Mario Tennis Fever is on the calendar. Whatever Nintendo has planned for the back half of 2026 will tell whether the console finds its momentum or whether the launch was the peak.

Why Investors Want the Price Hike Now

The Switch 2 hardware loss situation is the immediate problem investors are responding to. DRAM memory chip prices have spiked because AI data centers are buying memory chips at a rate that’s straining global supply, and console manufacturers are competing for the same components without the margins data centers operate with. Shipping costs are still elevated post-2020. Component prices across the board are higher than Nintendo’s pricing model assumed at launch.

Add in the holiday miss and the production cut, and investors see a company losing money on every unit sold and not selling enough units to make up for it on software volume the way the original Switch did.

The argument is that the current $449.99 isn’t sustainable and that Nintendo should raise it before the losses compound further.

Nintendo’s Actual Strategy

Nintendo has historically sold consoles at slim margins or outright losses to keep the entry price competitive and drive long-term software and accessory revenue across a hardware generation that lasts six to nine years. The original Switch launched in 2017 and is still selling, having now passed the DS as Nintendo’s all-time best-selling console. The Wii sold 100 million-plus units across its full life on a similar model. Furukawa has said publicly that the company prefers to focus on long-term momentum rather than reacting to short-term cost pressures.

That approach has worked for Nintendo for a long time.

And honestly, this is exactly the kind of analyst pressure that has wrecked plenty of long-term-thinking companies over the years.

The investor argument is that a price hike will protect margins now. The counter-argument, which Nintendo has historically made and which the data backs up, is that the price-sensitive entry-level buyer is the foundation of the entire revenue stack. Lose that buyer at the door and the lifetime software revenue from that household never materializes. Hardware loss is the cost of acquisition for the multi-year software relationship.

The Switch 2 might be in a different situation though. If the holiday miss reflects a real demand softness rather than a software-lineup gap, then Nintendo’s traditional acquisition-velocity strategy may not be working the way it did for the original Switch. The price-sensitive buyer may already be priced out at $449.99 in a way they weren’t priced out at the original Switch’s $299.99. In that case, holding the line on price doesn’t help acquisition the way it would normally.

The strategic question Nintendo has to answer Friday is whether the holiday miss was a software problem (in which case fix the software lineup and acquisition picks back up) or a price problem (in which case a hike actually doesn’t help and Nintendo needs to look at the cost structure differently).

What the Other Console Makers Are Doing

Sony and Microsoft have already taken the price-hike path multiple times. The PS5 disc edition has been raised more than once and now sits at $649.99 in the US as of March-April 2026. The Xbox Series X has seen similar increases through 2025 and 2026, also landing at $649.99. Both companies are responding to the same component-and-logistics cost pressures Nintendo is now facing.

That puts the Switch 2 at a $200 price advantage versus its competitors. A price hike would narrow that gap. The investor argument essentially asks Nintendo to give up some of that competitive advantage in exchange for short-term margin protection.

Consoles Used to Get Cheaper, Not More Expensive

For most of console history, prices fell over time. The PS2 launched at $299 in 2000 and dropped below $100 in many markets by the end of its run. The Wii started at $249 and saw repeated price cuts that helped drive its 100 million-plus unit total. The PS4 and Xbox One both followed the same curve after their 2013 launches.

This generation has flipped the trend completely. Mid-lifecycle price increases are now the norm rather than the exception.

The broader pattern isn’t isolated to consoles. Phones got more expensive across the post-2020 period. Streaming services keep raising prices. Subscription pricing has crept up across every digital service. The Switch 2 pricing question is part of a much larger story about whether the deflationary consumer-tech curve that defined the 2000s and 2010s has actually reversed.

What Friday Tells Us

The earnings call is when Nintendo’s actual answer becomes public. Holding the line at $449.99 means absorbing the hardware losses and betting on the 2026 software lineup to drive software revenue volume that offsets the hardware bleed. Raising the price means giving up the competitive advantage and conceding that the cost structure can’t be absorbed.

Either path has real consequences for the rest of the Switch 2 lifecycle. Friday is when we find out which way Nintendo is leaning.

Article compiled and edited by the Clownfish TV newsroom.

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Hat Tips:

• Bloomberg, “Nintendo Switch 2 Price Hike in Spotlight Ahead of Earnings” (May 6, 2026)
• Bloomberg, “Nintendo Cuts Switch 2 Production on Weak Holiday Sales” (March 24, 2026)
• IGN, “Nintendo Under Pressure to Raise Switch 2 Console Price, as Hardware Currently Sold at a Loss” (May 6, 2026)
• The Game Business, Switch 2 holiday sales reporting (December 2025)
• Circana hardware sales data (November 2025)
• GameSpot, “Nintendo Switch 2 Sales Were Reportedly Not Amazing Over The Holidays” (January 8, 2026)
• Nintendo Life, holiday sales analysis with regional breakdowns (January 2026)
• Variety, PS5 price hike reporting (April 2026)
• The Verge, Xbox Series X pricing (February 2026)