Nintendo has published a lengthy Q&A with investors off the back of its most recent earnings report, answering a series of questions around its fiscal year results, future goals and impact of releases like The Super Mario Bros. Movie and The Legend of Zelda: Tears of the Kingdom on its financial outlook.
The whole thing is worth a read for anyone interested in the business side of things, but one response from Representative Director and President, Shuntaro Furukawa, regarding the price of Nintendo Switch hardware and software, stands out in particular.
Speaking to the possibility of a price cut on Nintendo Switch hardware, Furukawa has said that the company has no immediate plans to reduce the retail prices of Nintendo Switch consoles. Overall manufacturing costs have reportedly remained high, and despite prices for certain materials used in production dropping, Furukawa says the actual impact on the cost of manufacturing won’t be seen for some time. If anything, it sounds like the possibility of a price increase could be equally as plausible, the representative claiming there are no plans to do so but suggesting the situation is being considered with a weak yen and high procurement costs.
You can read the full question and response below.
Q: My question is about hardware and software pricing. Material costs for hardware seem to be lower than they have been for a while. Is there a possibility of a price cut in the future? On the software side, The Legend of Zelda: Tears of the Kingdom is ten dollars more expensive (in the U.S.) than the previous title, The Legend of Zelda: Breath of the Wild. Could it be that development costs are on the rise? I’d like to hear your thoughts on future software pricing.
Furukawa: With regard to hardware, prices for certain materials have fallen but overall costs remain high. We must also continue to account for the impact of factors such as inflation and foreign exchange rates. Production was highly impacted during the previous fiscal year (ended March 31, 2023), so we are ensuring our parts procurement occurs far enough in advance to ensure stable production. Even if raw material prices decrease, it will take time for this to be reflected in manufacturing costs. Currently, there are no plans to reduce the price of our hardware during this fiscal year. On the other hand, while we also have no plans to raise prices, the yen continues to be weak, and procurement costs remain high, so we will continue to monitor the situation carefully.
Regarding the price of software, the MSRP (manufacturer?s suggested retail price) of The Legend of Zelda: Tears of the Kingdom is ten dollars higher in the U.S. than its predecessor, but this does not indicate a general increase in the price of our software. Our approach is to determine the appropriate price of a product on a case-by-case basis. It is true that development costs are on the rise due to the enhanced breadth of content and the requirement of more advanced technology to support online play, so the pricing for our new titles going forward is something that we will continue to consider thoroughly.
Further down in the published Q&A, the idea of a new generation of hardware is briefly floated with an investor wondering whether Nintendo would announce a Switch successor as early as two years before launch, like it did with the Switch originally. Nintendo responded to say that the timing of the Switch’s announcement was largely to due with its partnership with DeNa and its mobile business plans, and that any hardware or software related information would be announced at “the appropriate time.”
