Nintendo’s Physical Media Future In Doubt as Key Switch 1 and Switch 2 Cartridge Memory Supplier Exits Business

Physical video game media faces an uncertain future. While competitors like PlayStation have aggressively pivoted toward digital-first ecosystems, Nintendo has remained one of the industry’s few defenders of physical media. Unfortunately, Switch 2 and Switch 1 cartridges may be at risk, nonetheless.

The reason is that the primary manufacturer of the read-only memory (ROM) chips used in Nintendo Switch cartridges recently announced its complete exit from the ROM business. This could mean that future Switch cartridges could become more expensive or be released in limited quantities.

Nintendo’s Physical Cartridges Are at Risk

Nintendo remains committed to physical games, even as the rest of the industry moves in the opposite direction. Experiments like Game-Key Cards have drawn harsh criticism, but the Japanese company is still one of the last major supporters of cartridge-based games. That commitment, however, may eventually be tested by forces outside its control.

This week, analyst David Gibson shared a report that worried collectors and physical-format enthusiasts alike: Macronix, the main manufacturer of the ROM memory used in Switch and Switch 2 cartridges, has decided to leave the business entirely.

According to its latest financial report, the company will stop manufacturing new ROM products and will no longer report sales for that segment separately. The decision follows a 5% drop in sales last quarter and a 26% decline so far this fiscal year.

Macronix now plans to focus on NOR and eMMC memory chips and will stop investing in ROM altogether. While it is not the only memory-card manufacturer for video games, it is Nintendo’s primary partner.

Gibson believes physical games for the Switch and Switch 2 will continue to exist but only “for a while.” In his view, digital is steadily gaining ground on Nintendo consoles, which will make Game-Key Cards increasingly common.

“Digital is rising slowly. It was 61.5% of Nintendo’s software sales in Apr-Jun, +2.2pts YoY from 59.3%. It moves around by quarter (46.1% to 67.2% in the past year) because of big physical launches,” the analyst noted.

Nintendo Will Continue Supporting the Physical Format, But Industry May Force It to Become Fully Digital

Bill van Zyll, Vice President and General Manager for Nintendo Latin America, recently reaffirmed the company’s support for the physical format on both Switch and Switch 2, saying it wants to give players options beyond digital games.

“We are guided by consumer preferences and we take them very much into account. We also have a platform that we just launched. We’ve been with the Switch 2 for just over a year,” the executive explained. “It offers both digital and physical options. We have no plans to abandon the physical format. We know how much fans love it, so our stance has been to remain neutral.”

Still, Macronix’s announcement puts Nintendo’s position in a difficult spot. Sooner or later, the Kyoto-based company may be forced to raise the price of its physical games or stop producing conventional cartridges altogether and bet everything on digital.

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