Will Tariffs Increase Switch 2's Price? Why The Console And Games Are So Expensive
Industry experts react to the Switch 2 reveal, including the $450 price point and $80 for Mario Kart World
Nintendo Will "Feel The Impact" Of Tariffs
Analyst Daniel Ahmad of Niko Partners said Nintendo is likely to "feel the impact" of the tariffs on places like Vietnam and Japan where some Switch 2 units are produced. However, Ahmad doesn't believe Nintendo will raise the price of the Switch 2 as a result. At the same time, Ahmad said he doesn't foresee a scenario where the Switch 2 gets a price drop until 2030.
"The looming threat of reciprocal tariffs prior to the Switch 2 showcase will have also forced Nintendo to consider a higher price for the rest of the world," Ahmad said, noting that tariffs for Vietnam and Japan came in "higher than expected." (In Japan, the Switch 2 costs less.) It remains to be seen if the tariffs go into "full effect," however, Ahmad said, likely referring to Trump's on-again, off-again approach.
Reached for comment, a spokesperson for Nintendo declined to address the impact of Trump's new tariffs on the various countries and regions where Switch 2 will be sold. "If there are any price changes, we will make an announcement," a spokesperson said.
David Gibson, an analyst with MST Financial, told FT that Nintendo shipped more than 350,000 Switch 2 units to the USA back in January from Vietnam in an attempt to get ahead of the tariffs. Gibson said he expects Nintendo to have significantly ramped up shipments from Vietnam to the USA in February and March, also for this reason.
Piers Harding-Rolls of Ampere Analysis told GameSpot that he doesn't expect Nintendo to make a change to the Switch 2's price until 2026 at the soonest, as doing so would "disrupt the launch too much."
"If the tariffs persist, I think a price increase in 2026 might be on the table," he said. "Nintendo will be treading very carefully considering the importance of the US market. It might decide to take a hit on the hardware margin and aim to offset any pressure on profit by building a bigger eShop business and through more in-game monetization."
In general, Harding-Rolls said he believes US tariffs on imports are a threat to the console business in the US, with Sony and Microsoft also "looking on with concern and thinking of strategies to mitigate a squeeze on hardware profitability." Harding-Rolls went on to say the tariffs could push companies like Nintendo, Sony, and Microsoft to place a bigger focus on digital content and a shift away from physical.
"All Anyone Can Do At This Point Is Speculate"
Mat Piscatella of Circana said this is an unprecedented and "chaotic" situation as it relates to tariffs and their impact on video games, so anyone claiming to know how things will shake out may be speaking out of turn.
"All anyone can do at this point is speculate. We are certainly in uncharted waters here, and no one really knows what will happen next," he told GameSpot. "Obviously, the announced tariffs are having an immediate impact on the financial markets. And given the haphazard nature of how the tariffs are being calculated and applied, uncertainty is really the only certain thing at the moment."
Piscatella said there is "absolutely the chance" that the new tariffs or any additional future tariffs might amount to changes for US consumer products, and not just for Nintendo but for all players.
"This is what manufacturers, publishers, and retailers are all working out right now. It's to be seen just how quickly any potential changes to pricing will come," he said. "But, given the scope and magnitude of the tariffs, at least some changes should be expected. We'll have to wait and see just how much those increases may be, and to what products increases would be applied."
For the Switch 2, Piscatella said the console is likely to do just fine, even if there were to be an additional price increase at some point. "I'm not too worried about sales of the console in 2025. Given the limited quantities available in a launch year, and potential changes to regional allocation of those units, there should be more than enough super-enthusiast fans and higher-income households to allow the console to sell out in the US this year," he said.
"We've never seen anything like this happen in any of our lifetimes." -- Mat Piscatella
For the Switch 2's second year, however, Piscatella said this could be a "trickier" time. Whereas sales in the first year might skew toward the enthusiast crowd, the second year is when Nintendo will try to convince "mass-market buyers" to pick up a Switch 2. "But so many questions exist around what the US market will look like by 2026 that I don't think any one outcome is all that more likely than another," Piscatella said.
"We've never seen anything like this happen in any of our lifetimes. There are no recent benchmarks to look at to gauge potential impact, and no one truly knows what is going to happen next," he added.
Could Nintendo Produce Switch 2 Units In The USA?
A popular theory online is that Nintendo could avoid the tariffs by producing Switch 2 units in the USA. Trump has said the tariffs are being implemented in part to spur US manufacturing broadly. Tariffs generated $80 billion for the US in 2024, and Trump wants more. However, Ahmad pointed out that it's totally unrealistic to ramp up an entire production infrastructure quickly. By the time any possible US factories for Switch 2 came online, the US might have a different president with different ideas for tariffs.
"Nintendo would need to spend billions to open a factory in the US," Ahmad said."It'd probably take 4-5 years to complete this. Not to mention the time and cost to rebuild supply chain infrastructure and source components (which would be subject to tariffs because they're made outside the US). They'd then need to find, train and pay employees to operate the factory."
He added: "Nintendo would have to pay each worker about 10x to 15x more than they would for a worker in Vietnam. Then after you add up the initial capital expenditure, labor cost, supply chain cost, operational costs etc... you'd be able to buy a US manufactured Nintendo Switch 2 in 5 years for a significantly higher price than $450. And the kicker is that by the time they've done all that, the US will have a new president who most likely removes all the reciprocal tariffs anyway."
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So, Why Is The Switch 2 So Expensive?
Serkan Toto, an analyst with Kantan Games, told IGN that Nintendo likely factored in the tariffs when deciding upon the $450 price point for the Switch 2. Toto added that the higher price point might have been impacted by the "current inflationary climate" globally, along with Sony's decision to sell the PS5 Pro for an eye-watering $700 in the US in 2024.
For its part, Sony admitted the PS5 Pro was not aimed at everyone, but instead only people who would buy the newest and best PlayStation offering and had only a limited consideration on price. The Switch 2, on the other hand, is aiming to appeal to the mass market and is not designed for people who want a system with the beefiest specs.
Tariffs might be one part of the reason why the Switch 2 is so expensive, but Toto believes the real reason is pure business. "Nintendo is charging this price because they feel they can and that people will pay," he said.
Analyst and professor Joost van Dreunen, meanwhile, said the $450 price for the Switch 2 factored in higher manufacturing costs and uncertainty around tariffs, while Harding-Rolls said $450 makes sense given the Switch OLED currently sells for $350.
Harding-Rolls also speculated that Nintendo didn't reveal the $450 price point during the Nintendo Direct itself because the company might have been considering other price points and wanted to wait until the last minute to confirm a price due in part to the looming tariffs.
Piscatella, for his part, believes another impact of new tariffs could be that the console market will continue its shift toward older and/or more affluent consumers.
Game Price Hikes, Too
It's not just the Switch 2 console that's going up in price relative to what came before it–Switch 2 games may end up costing more. The Switch 2's marquee launch title, Mario Kart World, is priced at $80 USD for its digital edition–that's $10-$20 more than the current going-rate for new AAA games. Nintendo didn't explain or defend the price point, but Van Dreunen told IGN that Nintendo ran the numbers and decided that Mario Kart's gigantic audience will "tolerate a higher price point for what appears to be a significantly expanded experience compared to previous entries."
Indeed, Mario Kart World appears to be a significant step up from Mario Kart 8 based on our early hands-on time with the game.
Nick Arran of UK retailer Game told The Game Business that Mario Kart World's higher price point "seems expensive," but reminded people that video games were actually more expensive 30 years ago when inflation is factored in. Mario Kart 64 for the N64, released in 1996, was priced at $60–that's more than $100 today. Arran said video games "need to get more expensive" due to rising costs. He said Nintendo was "bold" to be the first mover, but admitted, "It does need to happen."
The most likely scenario from Piscatella's perspective as it relates to tariffs and their impact on game prices is that prices will go up. However, changes "may not be consistent or universal," he said.
"I'm also expecting that consumers will shift even more to free to play/live service games as they try to grapple with increased costs in everyday spending categories like food," Piscatella explained. "I'm also expecting the decline of physical software sales to accelerate even more, as physical versions of games may end up carrying higher pricing than digital versions. Or perhaps only some (or even none) of those expectations will end up working out. Who knows."
It bears mentioning that Nintendo has historically not played by the same rules as its competitors--the company, for example, is very hesitant to drop MSRPs. As an example, The Legend of Zelda: Breath of the Wild still carries an MSRP of $60.
How Well With The Switch 2 Sell?
According to Circana, Nintendo is expected to sell 4.3 million Switch 2 units in the US by the end of 2025, with Niko Partners modeling 14.5 million shipments globally by the end of 2025. Ampere, meanwhile, is forecasting global Switch 2 sales of 13 million units in 2025, rising to 31 million by the end of 2026. All of this data came from The Game Business.
For comparison, the original Switch sold 17.79 million units globally during its first year. Given that, the Switch 2 is expected to underperform relative to the original Switch, which is something experts have said for a while that they are expecting.
The Switch 2 officially launches on June 5. Keep checking back with GameSpot, as we'll have lots more on the Switch 2 in the time ahead. For now, check out GameSpot's hands-on preview of the Switch 2.
Every Nintendo Switch 2 Launch Game
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Nintendo Switch 2 Mario Kart WorldThis story originally appeared on: GameSpot - Author:UK GAG
