Today, Bloomberg reports an indirect threat for the Nintendo Switch 2 console coming from the ongoing memory storage crisis. As you probably are already aware of if you're a regular Wccftech reader, the global rush to build artificial intelligence hardware has brought major increases in the price of NAND flash memory: NAND contract prices are forecast to surge by up to 90% in this quarter compared with the previous three-month period, when prices had already spiked by over 30%.
This is an issue for the Nintendo Switch 2 because of its limited storage. The hybrid console only has 256GB of internal storage, which can then be expanded up to 2TB with microSD Express cards. That's very much a necessity, as a single one of the latest and upcoming games can basically take up half of the Switch 2's internal storage on its own. However, those cards are now getting much more expensive: according to Bloomberg, Japanese memory card manufacturer Nextorage Corp. now sells 256 GB microSD Express cards compatible with the Switch 2 for ¥13,350 (around $85), which is a 30% increase since the console's release in June.
The additional cost is, according to the report, affecting consumer interest in new Switch 2 games. While the hardware sales are outpacing the original Switch, the same cannot be said for software. As of the latest hardware sales update (17.37 million units), the average number of games purchased per console was 2.18, but the original Switch was already at 3.88 attach rate when it reached a similar hardware sales milestone. Granted, the previous console took longer to get there, which also gave users a little more time to buy interesting games as they were released.
Bloomberg points out that it is problem for Nintendo because it has a "razor-thin" margin on the console sales, not to mention the increased pressure from US tariffs and potentially a shipping costs rise due to the ongoing war in the Middle East. Furthermore, when they actually buy something, most Switch 2 users are choosing Nintendo games. Pelham Smithers, managing director at Pelham Smithers Associates, believes this could be an issue down the road:
If the Switch 2 gets a reputation for being just a vehicle for Nintendo games, then third parties may stop trying, which can start a domino effect in terms of consumer interest.
Nintendo shares have fallen by almost 30% since the launch of the Switch 2. Even today, the Japanese game company is losing 1.44%.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief. In the last decade, he has coordinated the overall output of Wccftech's gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews. Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications. His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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