What the weak yen might mean for Switch 2 pricing

Since our first glimpse of the Switch 2 last month, we’ve been left guessing on many crucial hardware details, including the all-important launch price. Now, Nintendo has hinted that the unsteady state of the international money market may play an outsize role in that pricing decision.

Addressing a question about Switch 2 hardware pricing during an investor Q&A session Wednesday, Nintendo president Shintaro Furukawa said (via machine translation):

In addition to the current inflation, we are aware that the exchange rate environment has changed significantly since the launch of the Nintendo Switch in 2017. We also need to consider the affordable price that customers expect from Nintendo products. When considering the price of a product, we believe that it is necessary to consider these factors from multiple angles.

At this time, we cannot disclose the specific price of the Nintendo Switch 2, but we are considering it while taking various points into consideration. At this time, we do not plan to change the price of the Nintendo Switch hardware.

Most of that is the usual polite executive-speak shorthand for “we’re not ready to answer that yet.” But the bit about exchange rates and inflation got us wondering just how vulnerable a Japanese company like Nintendo might be to the yen’s historic weakness, and what this might mean for the Switch 2.

More yen for your buck

When the Switch launched in early 2017, a single dollar could get you about 114 Japanese yen, a rate broadly in line with the norm over the previous two decades. Today, that same dollar can get you over 152 yen, matching rates the world hasn’t seen since before 1990.

This means that, at launch, the 29,980 yen asking price for the Switch in Japan was worth about $262, in roughly the same ballpark as the $299 US launch price. Today, Nintendo still asks 29,980 yen for a Japanese Switch and $299 for an American Switch. But that yen-denominated Japanese price is now worth just $196 under today’s exchange rates.

This means that, in real terms, customers currently pay a lot less for Nintendo hardware in Japan. Conversely, it also means Nintendo makes a lot more money selling hardware in the US than in Japan.

What does this mean for the Switch 2? Well, let’s say Nintendo wanted to launch its new system at about the same price as the original Switch but adjusted for the last eight years of inflation. The $299 US launch price of the Switch in 2017 is worth about $387 in today’s dollars, making a $399 Switch 2 price seem entirely reasonable in this scenario.