This is only a matter of minutes. Fiscal report for the year ending March 2018, Switch's first full year:

https://www.nintendo.co.jp/ir/pdf/2018/180426e.pdf

Nintendo as a whole, figures in millions of yen. Revenue: 1,055,682. Operating profit: 177,557. Profit ratio of ~17%. Switch hardware: 15.05m. Switch software: 63.51m. 3DS hardware: 6.40m. 3DS software: 35.64m.

Forecast for the fiscal year ending March 2026, Switch 2's first year:

https://www.nintendo.co.jp/ir/pdf/2025/250508e.pdf

Revenue: 1,900,000. Operating profit: 320,000. Profit ratio of ~17%. Switch 2 hardware: 15.00m. Switch 2 software: 45.00m. Switch 1 hardware: 4.50m. Switch 1 software: 105.00m.

In both transitional years there's a similar amount of total hardware being sold, but for the current fiscal year we have much higher projected software shipments (150m) than a generation ago (~100m). Software is Nintendo's biggest driver for profits, but despite more software expected to be sold, the profit ratio is projected to be the same as a generation ago. What does favor the previous gen is that Switch 1's initial marketing blitz fell into the fiscal year ending March 2017. When you factor this in, we end up with similar profits in both generations. Although... a gen ago Nintendo Switch Online had yet to become a paid subscription service while this gen inherits a lot of paid subscribers already.

Of course, the disclaimer here is that the current generation is using projections, so actual results may differ. But at this point in time there's no reason to believe that Nintendo's Switch 2 business runs on higher profit margins than Switch 1. Therefore inflation and more processing power are the most logical reasons for Switch 2's hardware price being notably higher than Switch 1's. All things considered, Nintendo is actually foregoing a part of their profits by giving Mario Kart World away so cheap, suggesting that the priority this fiscal year is building a big installed base for Switch 2 fast.

Thank you, this was a very helpful breakdown! I stand corrected, not entirely to my surprise. Obviously even this doesn't make me happy about the price, but at least it doesn't seem like greed is the issue. Of course there's still the question of how much these turbulent times affect Nintendo's projections, but with all the uncertainly, it's probably difficult to reliably eliminate the effect of all that on the profits. I guess I can reject the idea of Switch 2 being overpriced.

Nintendo does a lot of shitty things so in general deserves a lot of the hate thrown their way but there has for sure been a lot of silly over the top criticism with the Switch 2. Criticism towards hardware pricing is unreasonable considering what you're getting for the price and while criticism towards software pricing is warranted there's been a lot of misinformation and exaggeration going on there. People should stick to criticizing things like their treatment of fan games than getting overly riled up over the Switch 2.

You just won the thread. 

I don't buy the majority of Nintendo games that come out but still buy a lot of them. I only ever got 3DS at launch and got burned in the short term. 

I love a lot of Nintendo's products, but they are still subject to both my mild and extensive criticism when I feel it's needed. 

Software and accessory prices? Yeah, it's an issue.

Switch 2 console pricing in Japan and USA? Not an issue for what you get. 

I don't think I have any more to add, you nailed the Switch 2 situation. 

Yeah it is fine to criticise Nintendo, they are far from perfect, but when it gets to the point of obsessively spreading hate, misinformation and FUD to the degree that we've seen over the last two months, that's just sad behaviour.

Sadly hate gets clicks and clicks get revenue, so there's financial incentive for youtubers, websites, etc to spread this garbage.

I appreciate the compliment. You mention Japan and the US but I'd say the price in my country the UK is completely fine too. At £395 the gap between the price here and the US is actually notably bigger than it was for the Switch 1. That was £279 vs £299 so nearly the same and while it's the same price as the PS5 digital over there here it's a bit cheaper.

It also compares decently well to the Steam Deck since the LCD version is £349 but is overall a worse piece of hardware while the 512GB OLED one doesn't really have a clear winner either way but is £479.

The price of the system isn't as much of the issue with me. What made me lose interest in getting a Switch 2 was $80 games. This goes for any publisher. It's so dumb how Mario Kart Worlds and Outer Worlds 2 are the first 2 games that are $80. Both are graphically inferior to many games out now and both really don't do anything special to warrent the price. MKW was always going to sell millions of copies and easily recoup development costs. They didn't need to charge $80. Since Nintendo hardly ever cuts prices on their games, it will likely stay that price all gen, aside from temporary sales. I also think it is lame Nintendo is charging money for that extremely mid Switch 2 tutorial game. No reason for that. Should have been free.

I'm not sure how you can measure "hate" of the Switch 2 versus other systems, but I think it's pretty cut and dry that the Xbox One received the worst hate of any console I can remember. Due to how much backlash they recieved, MS reversed numerous decisions they had made before launch and shortly after release. It was bad enough that Sony openly mocked them about trading games and Don Mattrick quite before it released. As primarily an Xbox user, I'm happy MS got the slander they did because it made them change many of their terrible decisions and then follow up with some consumer friendly ones like backwards compatibility. Nintendo clearly didn't get that much hate since they stayed on course with everything. 

The thing is, the ragebait economy and grifter culture didn't exist as such back in 2013, so while Xbox One got a lot of backlash, most of it deserved, there wasn't as much misinformation or ragebait as with Switch 2 just cos of different times.

The Xbox One was one of the worst conceived consoles from a major manufacturers. It was terrible with its original sales pitch and it remained a bad console throughout its life, much like the Wii U. It was reasonable to hate these consoles and what they were trying to do.

But Switch 2 is a whole different story. It really is the console that people had asked for all along, but for some reason the internet decided to be shocked that prices for video games would go up after years of strong inflation. The hate that got thrown at Switch 2 was 99% unreasonable and the remaining warranted criticism is so minor that it's hard to care about it. Now that the system is out people begin to realize that even Nintendo undersold how good the console is.

Mario Kart World exemplifies how stupid people are behaving. "It's $80!", they say. Turns out that Nintendo isn't artificially limiting the availability of the Switch 2 bundle, so 90% of Switch 2 owners who wanted the game paid only $50 which is an absolute steal for the sequel to one of the best-selling games ever. The other 10% consist mostly of collectors who wanted to have a physical copy.

Nintendo stayed on course because they were convinced that they've done things right, and they are correct about that. It's the internet that will have to change course.