Nintendo’s (NTDOY) (NTDOF) President Shuntaro Furukawa said the company is keeping an eye on Switch 2’s profit margin as the increase in memory prices and ongoing tariffs remain an ongoing issue in the industry, Video Games Chronicle reported.
In an interview with Japanese news outlet Kyoto Shimbun, Furukawa was asked what the challenges were regarding Switch 2’s lower profit margin than that of the original Switch, the report added.
Nintendo did not immediately respond to a request for comment from Seeking Alpha.
“Hardware profitability depends on factors like component procurement conditions, cost reductions through mass production, and the impact of exchange rates and tariffs,” said Furukawa, according to a translated version.
“It’s difficult to generalize. Fundamentally, we aim to address this by advancing component procurement over the medium to long term.”
Furukawa added that the increasing cost of Random Access Memory, or RAM — mainly attributed to the growing demand of AI data centers — is something that could become an issue if it continues, according to the report.
“We procure from suppliers based on our medium- to long-term business plans, but the current memory market is very volatile,” Furukawa noted. “There is no immediate impact on earnings, but it is something we must monitor closely.”
On the impact of tariffs placed on Japan by the U.S., Furukawa said that at the start of its fiscal year Nintendo had forecast a negative impact of several tens of billions of yen due to tariffs, and added that it did see a corresponding impact in the first half of the year, the report noted.
“While it’s difficult to accurately gauge the future impact, our basic policy is to recognize tariffs as a cost and pass them on to prices as much as possible, not just in the US,” Furukawa noted.
“On the other hand, this is a crucial period for our game business as we promote the adoption of new hardware and maintain the momentum of our platforms. We are working on this while carefully considering the situation,” he added.
Furukawa did not comment on potential price increases, calling it “hypothetical,” as per the report.
In November, Nintendo said that for the fiscal year 2026 ending March 31, it expects to sell 19M Switch consoles, up from a previous estimate of 15M.
Last week, it was reported that Samsung Electronics (SSNLF) and SK hynix (HXSC.F) are looking to raise prices for server memory by up to 70% in the first quarter. South Korean companies Samsung and SK hynix are among the largest memory chipmaking companies. In November 2025, it was reported that memory suppliers like Samsung, SK hynix and Micron Technology (MU) were already facing shortages of older dynamic RAM, or DRAM, products after reducing production to focus on high-bandwidth memory, or HBM, which is necessary to make the advanced accelerators for AI. SK hynix is a major supplier of HBM chips to Nvidia (NVDA).