![]() ![]() Stuck-at-home families snatched up over 21 million Switches in 2020 alone. The Switch‘s portability and multiplayer games made it the perfect pandemic entertainment. Nintendo‘s 2020 fiscal year profits jumped over 200% thanks to COVID-driven demand. Pandemic Demand Increased as Supply DroppedĪt the same time that chip shortages decimated supply, the Switch saw record sales growth. Limited supply allowed resellers to charge $150+ over MSRP! The semiconductor shortage clearly enables Nintendo to avoid price cuts. Just look at the recent launch of the Switch OLED model: Model Instead, consoles sell out instantly even at full price. With supply this tight, Nintendo has little incentive to lower Switch prices and stimulate demand further. President Shuntaro Furukawa said they "do not expect semiconductor shortages to recover right away." ![]() In 2022, Switch hardware sales declined 20% year-over-year, with Nintendo citing supply struggles as the cause. Nintendo felt these shortages acutely when trying to manufacture enough Switch units. And prices spiked, with some chip types seeing over 90% price increases. As a result, wait times for chip orders across industries grew over 6 months on average. This mismatch between supply and demand got exacerbated by additional COVID disruptions to semiconductor fabrication and supply chains. But demand for consumer electronics like laptops and gaming consoles increased rapidly, as stuck-at-home workers and students needed them for remote activities. Chip makers shifted production away from automotive semiconductors. When the COVID-19 pandemic hit, lockdowns caused sharp declines in demand for things like new vehicles. This shortage stems from an ongoing global lack of the semiconductors and components needed to make not just game consoles, but also cars, phones, and more. Nintendo simply cannot manufacture enough units to meet demand. ![]() The #1 reason the Switch still sells at close to its $300 launch price is constrained supply. A Global Shortage of Semiconductors Drives Up Console Prices In this in-depth guide, I‘ll analyze the key factors that explain why the Switch costs more than expected – from economic trends to Nintendo‘s own pricing strategy. Yet six years later, it still comes at a premium price point that leaves some buyers with sticker shock. The Nintendo Switch has topped wish lists since its release in 2017. ![]()
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