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While the Switch 2 is ready to entice millions of players for Christmas 2025, Nintendo is going through a difficult period. The surge in component prices and a significant drop in its stock value are tarnishing the prospects of the Japanese company, which must juggle profitability and consumer satisfaction.
The 3 key facts not to miss
The end of 2025 was supposed to be synonymous with success for Nintendo with the launch of the Switch 2. However, the company is facing a real challenge: its stock value has dropped by 14 billion dollars. This plunge is explained by the increase in production costs, particularly those of essential components like RAM chips.
The main problem lies in the increase in the cost of 12 GB RAM chips, essential for the Switch 2. According to Bloomberg, these chips have seen their price jump by 41%. Additionally, NAND storage has also increased by 8%, posing a problem for Nintendo, whose business model relies on immediate profit margins.
This situation is exacerbated by players like Samsung who are redirecting their production lines, leading to a scarcity of components on the market. This scarcity affects not only Nintendo but also other manufacturers, such as the laptop maker Framework.
For now, the price of consoles remains stable on the shelves, but the cost of accessories, such as the essential MicroSD Express cards for managing game storage, is rising sharply. With the growing popularity of “Game Key Card” format games, the need for additional storage is becoming urgent. Consumers will likely have to absorb these additional costs in the future.
Shuntaro Furukawa, the president of Nintendo, is striving to reassure the markets by promising short-term price stability. However, it is likely that the company will not be able to maintain this position after the holidays, requiring a price adjustment to offset production increases.
Nintendo, founded in 1889 in Kyoto, has evolved from manufacturing playing cards to becoming a major player in the video game industry. Known for iconic franchises like Mario, Zelda, and Pokémon, the company has often dictated market trends. The Wii, DS, and more recently the Switch, have been resounding commercial successes. However, Nintendo has always operated in a competitive environment, where innovation must constantly face industrial and economic challenges. This current situation is just another example of the obstacles the company must overcome to maintain its leadership position.