Is Nintendo working on an upgraded version of the Switch? Or is the next Nintendo console a true generational leap that’s designed to push the boundaries like the Switch? At this point, only Nintendo knows the truth (and Activision Blizzard as well as Ubisoft). Until we get official confirmation, we’ll have to settle with breadcrumbs from official sources. Like, for example, the company’s annual report.
- Nintendo increased its R&D budget to $827 million.
- The budget increase comes ahead of the rumored Switch 2 release.
- Nintendo’s annual report revealed the budget increase.
- The budget includes hardware, services, and first-party games development.
- Dev kits for the Switch 2 may have been sent out.
Nintendo, as noted by TweakTown’s Derek Strickland, recently published its end-of-year report, where it revealed that it spent ¥110.0 billion ($827 million) on R&D the previous Fiscal Year. It’s a notable jump from the ¥102 billion ($708 million) budget for last year and ¥84.10 billion ($584 million) as well as ¥84.16 billion ($548 million) from 2020 and 2021, respectively.
Keep in mind that the current Fiscal Year ended last March 31. Given how many more games Nintendo has released and will still launch later this year, it wouldn’t surprise us if this budget balloons by a considerable amount for FY2024.
Nintendo slightly ups R&D spending to 110 billion yen ($827 million).
Note that this includes -everything- from hardware, services, and first-party games development.
It's not just Nintendo's budget for the Switch 2. pic.twitter.com/mvMPDUXhSx
— Derek Strickland (@DeekeTweak) July 6, 2023
Don’t forget, The Legend of Zelda: Tears of the Kingdom, falls under the current fiscal year because it was delayed – and for a good reason. But, while Nintendo might spend more on R&D this year, it’s likely going to recoup its costs with the release of several big hitters as confirmed at the most recent Nintendo Direct showcase. Leading the pack are Super Mario Bros. Wonder (October 20) and Super Mario RPG (November 17), the remake of Super Mario RPG: Legend of the Seven Stars. Other upcoming games for the Nintendo Switch before the year ends include exclusives like Detective Pikachu 2 as well as the Switch ports of Hogwarts Legacy, Batman: Arkham Trilogy, and Metal Gear Solid: Master Collection Vol. 1.
Of course, just because Nintendo will recoup its costs, doesn’t mean the numbers aren’t worrying. The increased research and development budget is part of a concerning trend of the unsustainable costs of video game development. Sony’s half-billion dollar investment in The Last of Us Part 2 and Horizon Forbidden West are good examples. Take-Two Interactive and Rockstar Games have reportedly spent a billion on making Grand Theft Auto 6 as well.
Sony, Microsoft, and Nintendo have tried to pass on the costs of developing games to consumers in recent years after they increased the price of today’s AAA titles from $60 to $70.
There’s genuine fear among gamers that this increase isn’t the last for the decade, especially in light of the recent reports. It’s not like others aren’t trying to cut costs either. Microsoft and Remedy Entertainment recently drew flak for skipping the release of physical discs of their upcoming games, Starfield and Alan Wake 2, respectively. The latter, specifically, insists its decision to skip the traditional release process and go the full digital route will allow it to save costs and speed up the development time, letting it release a quality product with minimal compromise.
It’s unclear if Nintendo will make the $70 price tag standard for all AAA titles or if the current pricing situation will remain for its lifecycle.
As for the Switch 2, it’s believed that Nintendo has sent out dev kits already, among the first of which to receive were the developers of Metroid Dread, MercurySteam. This would make sense after someone mistakenly leaked its codename all over the internet.
