We found an interesting new video that addresses the prices of the Switch 2 console and games, and how they relate to Sony’s spate of price increases.
Nintendo Forecast is not your typical Nintendo YouTuber. While the common bread and butter of these channels are longplays of Nintendo games, discussions about Nintendo game lore or metagame, or sharing rumors and news, this channel makes videos that talk about the business side of Nintendo. They literally have a video discussing what companies invest in Nintendo.
In this video, Nintendo Forecast explicitly explains why Sony has been raising prices, and why Nintendo is unlikely to raise the price on the Switch 2 now that it has been announced.
The main difference between the two is, contrary to appearances, Sony Interactive Entertainment, AKA PlayStation, is headquartered in the US, in California. This means that the profits PlayStation makes goes to the US, even if their parent company Sony Group is headquartered in Japan.
On the contrary, Nintendo of America is a subsidiary and the parent company, Nintendo Co. Ltd, is still headquartered in Japan. This makes Nintendo more vulnerable to the bugbear of Japanese companies doing business in the US – the dollar yen exchange rate.
To quote Nintendo Forecast; “It is the explicit aim of both Japan and America to strengthen the yen and to deflate the dollar.” In the last few years, the exchange rate has been favorable to Japanese companies like Nintendo. This is the reason that they have been experiencing unprecedented profits in the company’s 100 + year history.
However, with that starting to change, both Nintendo and Sony have had to change strategies. Sony hasn’t been raising prices of PlayStation 5 products in the US yet, but that can be misleading. Prices have actually been going up for their products all around the world, and Nintendo Forecast pointed out that it’s been happening since 2020.
And here’s where we get to the unhappy fact. As Nintendo Forecast says; “Inflationary increases are essentially just pegging the price at the same real-terms cost.” This relates to Matthew Ball’s State of Video Games 2025 report. Ball pointed out that the $ 60 price of video games in the past four decades has made it more expensive and less profitable to make games, even as they get larger and riskier to make.
For this reason, Sony, whose strategy has been to sell their consoles at a loss of most of those decades, are now raising those prices. The margins are no longer making sense for them, especially since PlayStation 5 gamers aren’t buying enough games to make up for it anymore.
As we pointed out, Sony has been able to hold US prices of PlayStation 5 products steady only because the PlayStation business is based in the US. But the growing unfavorable business conditions, which include tariffs, may change that. In fact, Sony may simply be avoiding having to raise prices twice.
On the other hand, Nintendo President Shuntaro Furukawa recently stated that there are no plans to change the Switch 2 prices at this time. Nintendo Forecast points out that Nintendo usually places a margin on their consoles, and the Switch 2 is clearly no different with its $ 450 asking price.
Nintendo Forecast argues that Nintendo can avoid raising the price of the Switch 2 precisely because of that margin. In general, Nintendo doesn’t do any price increases on their products until the January to March quarter, to keep the price increase as far away from the holidays as possible.
Ultimately, he believes that Sony will eventually raise prices of their games as much as their consoles. In fact, he estimates that by 2027, Sony games will have to cost between $ 90 to $ 95. Nintendo’s prices are getting them bad publicity now, but because the whole industry will have to adjust to the new unfavorable business conditions, they will all eventually be raising in prices.
Once again, quoting Nintendo Forecast, Sony isn’t going to hesitate to raise prices, because like they have seen happen to Nintendo, “they will gain no special thanks from freezing their prices for over a decade.”
It’s an overall unhappy state of predictions for gamers, but the industry’s big bet on this, of course, is that the higher prices will still be profitable, even with that smaller pool of potential customers. It remains to be seen if this will prove true, but the alternative course of action if it doesn’t work out may not necessarily be shifting to smaller games, made in less time, as the meme goes.
It may be that the industry will shift instead to the combustible but proven model of free-to-play games. Gamers may say they want one thing, but their buying behavior shows that they are eager to embrace games like Genshin Impact and Marvel Rivals, and even rationalize when they’re spending more on them than on full price $ 60 games.
With all that said, the tariffs absolutely make everything unpredictable in the future. At least this explanation gives us a clearer picture, or rather, a snapshot of where things stand for Sony and Nintendo right now.
You can watch Nintendo Forecast’s full video below.
