The Nintendo Switch 2 has been hit with steep manufacturing cost increases for both its memory and storage modules. DRAM prices have jumped roughly 41% while NAND flash storage costs are up about 8%.
Both components are essential to the console and highly specific to the Switch 2 architecture. Memory, or DRAM, is what holds data that is relevant to the game being played such as textures, while NAND flash makes up the long-term storage component.
This timing puts Nintendo in a tough spot. The Switch 2 is already considered to be expensive for what it is, and profit margins are razor-thin for Nintendo. A 41% increase in DRAM pricing is significant enough that it could force the company to make the highly unpopular decision of raising the Switch 2’s base price, or absorb the cost increase in the short-term.
Whether Nintendo raises the Switch 2 price depends on several factors. Large console manufacturers often negotiate long-term supply contracts with component suppliers. These agreements can lock in pricing for months or quarters at a time, and Nintendo may have secured memory supplies before the recent price surge.
The company could also have stockpiled memory components in advance. It’s a well-known fact that stockpiles of Switch 2 consoles were sitting in warehouses for months as the company waited for the perfect release date. Once those supplies run out, however, the company would face the new pricing reality.
The AI problem
Industry observers point to AI and data center demand as the main driver behind rising memory prices, and this isn’t limited to just Nintendo. Many consumers have noticed RAM prices going up by double, triple, even quadruple the normal prices in stores as AI datacenter contracts squeeze the memory supply.
While the datacenters are not using the same RAM and NAND components that the Switch 2 uses, their supply is nonetheless affected. The fabs making chips see far higher profits on RAM for AI use compared to consumer products, leaving some to deprioritise consumer chips or even abandon them entirely.
Gaming hardware across the industry could see price adjustments. PlayStation, Xbox, and PC gaming all depend on the same memory components facing price increases. Memory manufacturers are experiencing demand from multiple sectors competing for limited supply, and it is unclear exactly how long this will last.
