Nintendo explains why Switch 2 hardware and software cost so much
$450 system isn’t being sold at a loss, wasn’t priced with tariffs in mind.
Looking this sleek comes at a price.
Among the many surprises during last week’s wider unveiling of the Nintendo Switch 2 was the pricing: $450 for the console itself and $70 to $80 for many first-party games. Now, in a set of interviews posted today (but conducted during last week’s unveiling event), Nintendo executives are explaining and defending those prices, even as Trump’s tariffs are apparently forcing the company to pause and reassess its whole launch strategy.
Nintendo of America President Doug Bowser was speaking to CNBC just as Trump’s tariffs were being announced, and said in the moment that “we’re still all trying to really understand [the tariffs] better and understand what possible impacts may rise from that.” At the same time, he said that the company “didn’t consider tariffs into that equation” when choosing the Switch 2’s $450 price and instead went with what “we felt that was going to be the right price point for our consumers and the right value proposition if you will for the device that we’re creating.”
Elsewhere in that CNBC interview, Bowser suggested that Nintendo isn’t following the Wii U example of selling hardware at a loss in order to gain more potential software customers. Instead, Bowser said the company is “trying to find a way to maintain… margins on the hardware even though they may be more slim than they are on software,” and then “to make sure that they’re seeing the value in their investment in one of our devices” through software.
Those hardware margins might be hard to maintain in the United States if Trump’s tariffs add to the cost of importing consoles manufactured in Vietnam or China into the country. That said, Bowser added that “we’ve had some time to build up inventories on a global basis,” and that “some” Switch 2 units are “landed already… in the United States,” which could help delay the financial pain of any tariffs on Nintendo’s part.
Things just cost more now
In justifying the $450 price of the Switch 2, Nintendo executives predictably pointed to the system’s upgraded hardware specs, as well as new features like GameChat and mouse mode. “As you add more technology into a system, especially in this day and age, that drives additional cost.” Nintendo Vice President of Player & Product Experience Bill Trinen told Polygon.
That said, Trinen also pointed toward rising prices in the wider economy to justify the $150 jump between Switch and Switch 2 pricing. “We’re unfortunately living in an era where I think inflation is affecting everything,” Trinen said.
The Switch never saw a nominal price drop, but inflation still ate away at its total cost a bit over the years.
The Switch never saw a nominal price drop, but inflation still ate away at its total cost a bit over the years.
Trinen isn’t wrong about that; the $299 early adopters paid for a Switch in 2017 is worth about $391 in today’s dollars, according to the BLS CPI calculator. But for customers whose own incomes may have stayed flat over that time, the 50 percent jump in nominal pricing from Switch to Switch 2 may be hard to swallow in a time of increasing economic uncertainty.
“Obviously the cost of everything goes up over time, and I personally would love if the cost of things didn’t go up over time,” Trinen told IGN. “And certainly there’s the cost of goods and things that factor into that, but we try to find the right appropriate price for a product based on that.”
Is $80 the new $70?
Talk of inflation extended to Trinen’s discussion of why Nintendo decided to sell first-party Switch 2 games for $70 to $80. “The price of video games has been very stable for a very long time,” Trinen told Polygon. “I actually have an ad on my phone that I found from 1993, when Donkey Kong Country released on the SNES at $59. That’s a very, very long time where pricing on games has been very stable…”
Cherry-picking Donkey Kong Country‘s price from near the end of console gaming’s cartridge era might be a little misleading. But Trinen is correct that $80 in today’s money is not out of line with historic inflation-adjusted prices for console games, even in the disc era.
Speaking to CNBC, Bowser said that Nintendo is “not really looking to establish a [new] benchmark for pricing” with Mario Kart World‘s $80 price tag. He echoed the same sentiment to The Washington Post, saying that the game’s higher-than-normal price is “less about representing the industry… this is really about Nintendo deciding the right thing to do for its products or what the pricing should be for its products overall.”
Instead of flat top-end game pricing, Bowser told CNBC “we look at every game and every experience and determine what we believe is the right price point based on that experience.” It’s a talking point Trinen echoed, telling Polygon that “we take an approach of looking at: What is the experience, and what are players going to enjoy out of this game? What is the length of the game—what’s the volume of the experience? How in-depth is it? And then we price appropriately based on what we think the value of that experience is.”
That said, Nintendo of America Senior VP of Product Development and Publishing Nate Bihldorff told Digital Trends that game pricing is still as much an art as a science. “There isn’t an Excel sheet up here where you’re checking boxes, and each time you add $5,” Bihldorff said. “It’s a number of factors that probably can’t be easily quantified for each one. And that’s why you’ll see a fairly different set of prices for different pieces of software.”
Kyle Orland has been the Senior Gaming Editor at Ars Technica since 2012, writing primarily about the business, tech, and culture behind video games. He has journalism and computer science degrees from University of Maryland. He once wrote a whole book about Minesweeper.
