Nintendo Co.’s decision to increase the price of its Switch console with an updated model set for October will test new waters for console makers, which have traditionally sought to juice sales by slashing prices instead of raising them.
The coronavirus outbreak reconfigured expectations across the gaming industry, with companies like Nintendo, Sony Group Corp. and Microsoft Corp. all struggling to satisfy runaway demand from players seeking entertainment and escape. The two Japanese gaming giants reported record profits, downloads and subscriber numbers over the past year.
Now Nintendo is betting this momentum can be sustained with a new ¥37,980 ($350) model, about ¥5,000 higher than the standard model’s original price tag and a repudiation of traditional console economics. In an industry where consoles typically get mid-life price cuts, the Switch is moving into a higher tier — largely on the strength of a larger and better OLED display and some added storage. The upgrades are estimated to cost around $10 (¥1,100) more per unit, meaning Nintendo is improving profit margins and relying on its rich library of games to keep sales brisk.