Amidst a weak yen in Japan, electronics are currently facing some serious price hikes, including the likes of Apple's iPhone, but also emcompassing a wide range of pretty essential goods including TVs, fridges, dishwashers, and printers.
One area that seems to be immune (for now) is the video game console market. According to Bloomberg (thanks, VGC), the three major console manufacturers - Nintendo, Sony, and Microsoft - were asked whether a price increase is on the cards in Japan in the near future. While Sony and Microsoft conspiciously declined to comment, Nintendo stated quite plainly that it has "no plans" to raise Switch prices.
Of course, plans can change at the drop of a hat, but it's nevertheless reasonably welcome news for customers. As cited by Bloomberg, none of the console manufacturers want to be the first to raise the price of its products, but what this currently means is that consoles in Japan are effectively $100 cheaper than anywhere else.
On the flipside, as a result of companies not opting to raise their prices, this has also led to scalpers in Japan buying consoles and selling them on again at a profit at the most opportunistic time, further increasing demand in the country and driving profits away from shareholders. As such, an eventual price increase may seem almost inevitable.
One likely reason that Nintendo is declining to raise the price of the Switch is that all models are still selling like hotcakes in Japan. Just last week, Nintendo managed to sell almost 70,000 Switch units, whereas the PlayStation 5 managed just over 11,000. It's clear that Nintendo sees no reason to raise its prices when its products are still performing so well. Nevertheless, as the yen weakens, Nintendo is expected to report a profit loss as part of its next financial results.
Do you think console prices will rise in Japan? Who will be the first to cave? Let us know in the comments!
[source bloomberg.com, via videogameschronicle.com]
Comments 50
Hmm...sounds like a good time to go on holiday to Japan!
Is that a sinister, elongated Emperor Palpatine- style "for now" ...or just a general "for now" with a casual shrug? Asking for a friend.
@GrailUK if having to quarantine for 5 days while on vacation sounds like a good time.
@Sonos Yeah, good point, well made lol.
Strange, I hadn’t considered that as the big 3 could easily raise the price and cite inflation. I wonder how much of a profit shrink is happening (as a shareholder I am curious).
It's already overpriced
I was surprised to see talk of increased prices on the ps5 the other day, I guess it's only logical that Nintendo and Microsoft have those questions raised as well.
The place where I work depends on certain chips for our product to work, and the skyrocketing cost of those parts has forced us to increase the price quite a bit just to break even, so it's not unrealistic to wonder about price increases
I just started my first real job, and I'm making some pretty decent money, so I might buy a Switch OLED this coming payday. Its totally not a necessary upgrade, but I do spend a lot of time playing in handheld mode, and I can afford it now...so, why not?
They can try and explain it anyway they want, if any of these companies increase the prices on their hardware it's going to be a bad look.
In my country you can get an OG Switch for around 270 euro, so prices has already gone quite drastically down (Lites on the other now cost around 214-214 euro - I paid 200 in march 2020 for mine).
@Gamer83 especially Microsoft when they're in the process of spending 70 billion on Activision clearly not strapped for cash lol
@Would_you_kindly
Yeah. And, tbh, I think of all the big 3, MS actually is the most likely take the hit. It's do so before with original Xbox, although obviously it was trying to establish itself then. Now it would be more for better hardware sales, not sure if MS values that very high but if it does, I could see the company taking the trade off a little less profit on hardware for better marketshare and hope to make up the difference with better software and accessory sales.
Wait what I thought price was supposed to decrease over time not go up. Now if it had pro after ot or super before it I could understand
Switch is a 5 year old console still selling at it's original price of $300. Which is basically unheard of for a video game console. The OLED is $50 more. Certainly the part prices have come down enough over 5 years that Nintendo can still make a profit even with inflation.
Now will the Switch 2 cost more than originally planned in a year or 2 b/c of inflation on the new parts they'll need? Well that's very likely, but raising the price of 5 year old hardware which has never ever seen a price drop would be a seriously bad look.
I mean Nintendo's already increased the price when you consider they upped the price $50 with the OLED model. It's hardly costing them any additional money to produce the OLED model vs the OG Switch model.
I wouldn't be surprised if we saw a $400 price (and other market equivalent) for the Switch Pro whenever that releases. It would be tough for Nintendo to justify a >$400 price tag unless Sony/Microsoft raised their prices too considering a PS5 Digital is also still retailing at $400 and XBOX Series S at $300.
@Gamer83 yeah I think they would because that's what they do with gamepass
I hope none of them increases prices. We'll see.
And Apple? Good grief they already charge way too much for all their products.
Post pandemic YOY demand for gaming is in the toilet. Sony cannot get consoles into users hands.
They won't raise prices if they went to business school.
I doubt they'll increase the pricing of the Switch. The same clickbait articles about PS5 came out elsewhere and I don't see it ever happening. That's just suicide.
@jorel262 Completely agree regarding Apple. Overpriced garbage imho. Hopefully Nintendo keeps the Switch where it's at for now. For my money, $350 for an OLED model, for all the Switch does, is definitely not overpriced.
Their margins must be high enough that they can afford to keep prices steady at least for a while longer, even with current high rates of inflation. High sales would suggest the market can cope if they do.
I’m always frustrated to see consoles raise their prices due to inflation. I can understand if inflation lead to peripherals getting raised, but these manufacturers get a profit from the consumer anyways, through software sales over time anyways. Meta raising their prices only drives the narrative that the VR platforms have a low attach-rate and must see these devices sell at a profit. It also just seems like a way to counter-balance slow sales and possibly make their next VR generation more appealing to purchase, if they’re going to be closer in terms of the price range.
I remember in Canada, when the dollar was plummeting, Sony raised their PS4 price by $50 (alongside games going up $5-$10 around that time). Its such a buzzkill and a slap to the consumers. With that said, I don’t see Nintendo doing the same for 6 year old hardware.
Aren't consoles generally loss leaders so that most of the profits are made from selling marked up games?
@bones It is (supposed to decrease over time).
This is because of Facebooks dumb decision to increase the price of their VR headset, Quest 2...after 2 years on the market.
Just because Meta was dumb enough to increase the price of the Oculus Quest doesn't mean Nintendo/Sony/Microsoft will follow suit.
People charge what they can get away with. Perhaps Facebook knows the new Sony vr is going to be substantially higher than we think so meta knows it can get away with a price hike.
Nintendo is no different. They surely could have dropped the price of the switch over five years. But screw the customer…. We’re making money over here.
@syrupdash Switch is sold at a profit
@syrupdash At least during the Reggie era - Nintendo has always said they dont sell at a loss. Or that was their goal.
@Not_Soos,
Seriously the Switch OLED is a real game changer, my daughter still has the original longer battery life model, but the OLED beats it in every department.
I would hope they wouldn't raise the price of a 5 year old console, if anything it should be the opposite.
Thanks god nintendo doesn't increase the price of a 5 years old console that runs on 10 years old hardware that never went down in price.
At least they're not like lego who made 2 billion past year and decided to raise their prices starting yesterday
I would be super anti raising prices but $100 less? I didn't realize the yen was so weak right now
Oh dear there will be a reckoning if any of the big three try to raise the price of their consoles. I can only imagine the backlash that would ensue. That should absolutely be a last resort.
And yet some people cry they need a Switch 2.
(chuckles at them internally)
Better a hardware revision to make it cheaper to manufacture than raise the price.
@Sonos 5 days flies when you can finally start your Switch backlog lol
@Not_Soos a big rule I always had was spend that first paycheck on you since you were going weeks with less anyway. Treat yourself and then get back to paying the bills.
@Mr_Gamecube different retailers will offer above MSRP to get some more profit on items that fans want. Just a business decision for that location, keep searching and you'll probably find it at the regular price. It appeared on Amazon this way for a while & then dropped randomly.
@Kamil118 hahah
@syrupdash They just covered this. Nintendo actually makes a profit on it's hardware. In fact, Nintendo made more profit in hardware every year except one since the Switch has been on the market.
@koffing They already made the Switch Lite. It's $150 cheaper than the Switch OLED.
@Kilamanjaro maybe. for me, Japan is a bucket list destination. I'm not there to play catch up on video games. I'm there for the cherry blossoms, fish and culture.
Yeah it is kinda weird, isn't it? Inflation has hit pretty much everything else, what makes something as comparatively inconsequential as video games so special? I ain't no economist, so I'll let someone more informed than I break it down. Oh well, I have my Switch anyway so I'm good!
Probably wise to stand pat, especially through the holiday season. Even if they aren’t making as much, they can recoup through software, to an extent online service and also as a cheaper console, save the Series S…..
Inflation is going to be the only thing that drives down white hot consumer demand....There'll be plenty of game hardware supply soon, with nobody who can afford it.
Well crap, why have I not been scalping Switches in my spare time all along???
@syrupdash No. There was one console (3DO IIRC) that actually tried this business strategy. It failed miserably.
@Sonos hey you've gotta sit on a train sometime to get around there! When I went I played Pokemon Red on my 3DS when going from Kyoto to Tokyo and it feels like you're really in the game. I looked it up and you can go now but it has to be with a guided tour. Can't wait until it opens up again, I want to return next year
Sony has just increased the price of the PS5 in almost every market outside of the US.
Looks like the obvious decision to rule out price increases was not so obvious to everyone...
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