Excitement surrounding the Nintendo Switch 2 launch quickly turned to surprise the moment pre-order information emerged. A more expensive console was widely expected, but the biggest shock arguably came from seeing the price of Switch 2 games.
“Drop the price” comments flooded Nintendo’s subsequent livestreams, as fans came to terms with the increased cost of gaming. In Australia, the Nintendo Switch 2 costs $699.95 for the console alone. Mario Kart World, Nintendo’s flagship launch game slated for 5 June, carries a recommended retail price of $119.95.
$40 pricier than the previous Mario Kart (albeit a re-release of a Wii U game), the more than 30% bump has been a major talking point. Donkey Kong Bananza, another new game coming to the Switch 2, is listed for a slightly lower $109.95 via EB Games.
So, why the price increase? How did Nintendo arrive at the specific figures that are now public? Like anything involving the games industry, it’s complicated, with several variables to consider.
Nintendo Switch 2 game pricing is not static
Nintendo of America President Doug Bowser told CNBC that “there’s no standard pricing” for Switch 2 games. He described aspects like gameplay depth and longevity as factors that went into Nintendo’s pricing strategy, but nothing is set in stone.
“We look at every game and every experience and determine what we believe is the right price point based on that experience,” Bowser said.
He then explained that Donkey Kong Bananza is $10 cheaper than Mario Kart World “because that is what we feel is the right price point for that particular gaming experience.”
But what distinguishes one “gaming experience” from another? Veteran games industry consultant Jon Cartwright, who helps developers with the business side of making games, mentioned that perception is an important consideration.
“When I’m talking to indie developers and we’re looking at pricing the game, it’s always the most difficult conversation,” he said. “Is this a game that people can play once, or is it a game they can go back to and get more out of?”
“Because all of this is about perception of value.”
Mario Kart World is being advertised as a big multiplayer game with lots of content, while Donkey Kong Bananza appears to be a more focused single-player experience. Both are still considerably more expensive than the original Switch’s games, however.
What determines a game’s price?
Setting the price of a video game is tough. Particularly for independent developers and publishers, there’s not necessarily a set pricing structure to follow.
Cartwright previously told GamesHub that project costs and scope are the primary determining factors. Games that take a long time to make or employ large teams need to earn more money, which may warrant a higher price. Competitive analysis also comes into play; players might be accustomed to paying more for one genre and less for another.
As for the price of Nintendo Switch 2 games, “cartridges are simply more expensive to manufacture than discs,” Cartwright added. “Discs are relatively cheap to manufacture.”
Even though the original Switch also used cartridges, the increasing costs of game development and conducting business have seemingly necessitated the change in price strategy.
There’s also the matter of where the bulk of Nintendo’s sales come from. According to the company’s March financial report, first-party games accounted for 81.2% of total software sales throughout the 2024 fiscal year.
‘First-party’ refers to games made by internal development teams, as opposed to external, ‘third-party’ developers publishing games on a platform they don’t own. PlayStation leans heavily on externally made games; according to Sony’s Q3 2024 report, first-party games accounted for close to 12% of total PlayStation software sales.
In other words, Nintendo’s in-house productions are much more intrinsically linked to its fortunes than other platforms. By extension, pricing is arguably even more important to Nintendo than its competitors.
Some competitors, like Microsoft’s Xbox division, famously sell hardware at a loss to subsidise revenue via software and services like Game Pass. It’s not clear how much money the Nintendo Switch 2 will make – if any – on each console sold, but Bowser did explain that the margins are “more slim than they are on software.”
Regardless of what the actual figures are, it’s another reminder of how important software is to the business of these companies.
Is $120 too much for a video game?
Speculation remains rampant over whether Mario Kart World’s price will scare people off. Cartwright is quick to remind detractors that $100-plus games have “already happened” and that “Nintendo is not new” to the current price trend. He pointed to a full-priced copy of 2022’s God of War: Ragnarok costing $124.95 as evidence.
It may seem contradictory to the point about cartridge versus disc manufacturing costs, but the EB Games listing proves that high-priced games still sell. God of War: Ragnarok sold more than 15 million copies in a year.
Despite the initial shock, there’s a sentiment that Nintendo’s higher-priced games will continue to sell well.
“There is a historical quality around Nintendo that is partly why I think they can lean into that price and I think people will pay it,” Cartwright said.
He also mentioned Nintendo’s pedigree that dates back to the brand’s “Seal of Quality“. The badge was used to differentiate games that met Nintendo’s stringent quality measures during a time rife with poorly made games.
While the current state of the Nintendo eShop has challenged Nintendo’s quality-based ethos from a curation perspective, the company fiercely protects the reputation of its in-house games. Price is one such tool at its disposal used to maintain the brand’s premium reputation.
Look at The Legend of Zelda: Breath of the Wild as an example. It launched simultaneously on the Wii U and Switch consoles in March 2017 for $89.95. According to Deku Deals, Nintendo has never sold the game for less than $62.95.
Compare it to Horizon Zero Dawn, the PlayStation 4 open-world RPG that came out at roughly the same time. Based on the data available on Psprices, the version with added DLC routinely dropped to $12.47 on the PlayStation Store.
As any games enthusiast will attest, Nintendo’s games hold value for a long time compared to other platform holders. And that’s largely down to its pricing strategy, which Cartwright describes as being Apple-like.
“I always feel Nintendo are a bit of a premium brand,” he said. “In the same way that if you’re buying an iPhone, you know you’re paying [a premium price] because it’s Apple, because you’ve got that walled garden, because you’ve got all the things that Apple is.”
“[Keeping prices consistent over time is] an intrinsic part of their business model in terms of the value proposition.”
As Cartwright alluded to earlier, value is subjectively tied to perception. Early impressions of the Nintendo Switch 2 were glowing, but will it be enough to persuade budget-conscious shoppers?
The post Why Nintendo Switch 2 games cost nearly $120 appeared first on GadgetGuy.
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