Switch crisis ahead? Nintendo faces a big problem

The hardware bottleneck hasn’t left Nintendo untouched either. Thanks to the chip crisis, the production costs of the switch consoles are increasing – the company surprisingly announced this during a question and answer session. But will that also affect the selling price of the popular handheld console?

Nintendo Switch: console production costs are increasing

Although the Nintendo Switch will celebrate its fifth birthday in a few weeks, the small handheld console is far from being old-fashioned. Only recently Nintendo announced that they have now sold more than 100 million consoles and have even overtaken their own Wii. So the Switch seems to be a real cash cow.

But it almost looks as if the hardware crisis could ensure that this tide is slowly turning. During a question and answer session after the presentation of the current business figures, the question arose how Nintendo is dealing with the current situation – and what exactly are the production effects of the bottleneck. Nintendo President Shuntaro Furukawa said the following:

“The Nintendo Switch was launched a few years ago and we’ve continued to work on it
reduce production costs – but recent component shortages have increased this.

(…) if costs remain at current levels in the next financial year, we expect them to have an impact on gross profit. (…) Unless the situation changes dramatically, we do not expect profitability to improve in the next fiscal year and beyond.

However, these cost increases will not impact our production plans, and we will continue to produce the required quantityto meet the demand.”

(Source: Nintendo)

For whom is it worth buying the OLED switch? We tell you in the video:

Will the Nintendo Switch get more expensive now?

Even if the production costs for the Nintendo Switch increase, it is not to be expected that Nintendo will increase the selling prices. After all, just a few months ago, the company lowered the RRP of the handheld console in Germany from 329.99 to 299.99 euros.

In contrast to Microsoft and Sony, Nintendo also makes good money with every console sold, as the production and delivery costs are likely to remain below the retail price (source: forbes). So Nintendo won’t make a mess with the sale.