Key Takeaways
1. The Nintendo Switch 2 sold over 10 million units in four months, benefiting from easy availability.
2. Nintendo faces a DRAM supply crisis, increasing the cost of components like RAM and NAND flash memory.
3. The company’s market value has declined by about $14 billion since December, affecting its stock price.
4. Predictions suggest rising DRAM prices may lead to a potential retail price increase for the Switch 2.
5. Nintendo may choose lower profit margins to cope with rising costs, impacting its stock performance.
The Nintendo Switch 2 (available here on Amazon) was released on June 5, 2025, with a suggested retail price of $449. In just four months, it managed to sell over 10 million units. This impressive number was partly due to the console’s easy availability. In comparison, the Sony PlayStation 5 sold 7.8 million units in its first six months but faced stock shortages during that time.
Supply Chain Challenges
As reported by Bloomberg, Nintendo is facing issues with the DRAM supply crisis. The 12 GB of RAM in the Switch 2 now costs the company 41% more than it did just three months ago. Additionally, the price of the console’s 256 GB of NAND flash memory has increased by 8%. This rise in costs also impacts the prices of game cards and microSD Express cards.
Market Impact
According to Bloomberg, Nintendo has seen a decline of about $14 billion in market value since early December, with its stock price dropping to the lowest point since the Switch 2’s launch, largely due to the increasing production costs. Predictions indicate that DRAM prices will continue to rise throughout 2026, which might force Nintendo to increase the retail price of the Switch 2. On the other hand, laptops set to launch next year are expected to be at least 20% pricier due to escalating DRAM and NAND costs. Nintendo might opt for lower profit margins instead, but this could put additional strain on its stock price.
Conclusion
The situation presents a challenging landscape for Nintendo as it navigates these economic factors while trying to maintain its market position.
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