Nintendo could lose up to $50 per Switch 2 sale without price increase, as memory costs rise

Switch 2 sales continue to impress, recently reaching the 17.4 million mark. Still, rising memory costs threaten Nintendo's healthy profits. One analyst projects that, at its current price, the manufacturer could lose as much as $50 per console sold by the end of 2026.

Uncertainty looms over Nintendo's finances

As noted by Nintendo Patents Watch, several Japanese sites discussed the latest financial report. Nikkei Shimbun revealed that the company’s net income from April to December 2025 soared 51.3% year over year. Yet, higher component costs may soon make sales of its latest handheld less lucrative.

According to sources cited in the article, tariffs have already affected profits to some degree. With a lower Switch 2 price in Japan also a factor, the console is considered “profitable by a deficit.” Even so, a USB Securities analyst believes the system currently has a gross margin of $23 per unit. If the company must pay higher DDR5 memory prices, those numbers could reverse.

USB Securities estimates that the cost of the modules used in the handheld will rise from $46 to $120. Before 2026 concludes, the increase would result in a $35-$50 loss on each system sold.

When might the Switch 2 cost more?

Nintendo President Shuntaro Furukawa responded to concerns over added manufacturing burdens. A Switch 2 price increase is one way to counteract losses. Furukawa said he is monitoring “sales trends and profitability”, but “Nothing is being decided at the moment.”

The executive suggested that the company is willing to absorb a “temporary deficit”. He hopes the memory shortage will ease sooner than expected, despite predictions that it may last until 2028. Hideki Yasuda of Toyo Securities also anticipates that long-term contracts with suppliers like SK Hynix will insulate Nintendo in the next fiscal year.

Of course, the Japanese gaming giant doesn’t only earn revenue from hardware. Anxious stockholders are waiting for the next slate of Switch 2 games to arrive. A rumored early February Nintendo Direct will likely focus on third-party titles. Even so, only a new 3D Mario or Zelda experience may address criticism over lackluster exclusives.