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Nintendo's biggest ROM chip supplier is bowing out of the business
Confirmed
In Short: Chipmaker Macronix is exiting the ROM chip business, potentially raising costs for Nintendo's physical game cartridges.
Chip manufacturer Macronix announced it will end production of ROM chips, a key component in Nintendo's physical game cartridges, as reported by Ars Technica and GameDev.net.
Macronix cited the declining profitability of ROM chips, which now represent only 5 percent of its business, down from 26 percent a year ago.
Nintendo, which relies heavily on physical game sales, uses Macronix as its main memory chip maker for cartridges, according to analyst David Gibson.
With Macronix's production capacity capped at 25,000 12-inch wafers per month and a $1.2 billion expansion taking over a year to implement, the supply of ROM chips for Nintendo's cartridges may become tighter.
Nintendo's commitment to physical games remains strong, with physical titles accounting for 38.5 percent of its sales, higher than competitors like Capcom.
Macronix's shift could increase production costs for Nintendo, as the company may have to rely more on other suppliers like Rohm and Lapis Semiconductor.
Despite Sony's plan to phase out physical game discs by 2028, Nintendo has no plans to abandon physical games, emphasizing their importance in its sales strategy.
Nintendo does not buy ROM chips directly from Macronix; MegaChips designs the ROM chips according to Nintendo's specifications and outsources manufacturing to Macronix.
Nintendo's reliance on physical cartridges may face challenges as ROM chip production becomes less prioritized by major suppliers.
What this adds
The shift in Macronix's focus could lead to increased costs for Nintendo's physical game cartridges, but the company is not without alternatives.
Nintendo's strong commitment to physical games suggests it will find ways to maintain cartridge production despite the challenges.
The transition to digital sales is likely to continue, but physical games remain a significant portion of Nintendo's business strategy.
What's confirmed
- Chip manufacturer Macronix announced in its third-quarter earnings report that the company’s production of ROM chips “has reached its end” and that it will begin “gradually decoupling from the game industry,” as reported by Taiwanese news site BigGo Finance.
What's still developing
- And last year, Japanese publisher Inin only committed to a full Switch cartridge release for R-Type Dimensions III after it said “two new smaller cartridge [storage capacity] sizes for Nintendo Switch 2” lowered the cost of producing those carts.
- Nintendo ROM supplier Macronix is leaving the business as demand for its data center memory booms. Nintendo ROM supplier Macronix is leaving the business as demand for its data center memory booms. Posts from this author will be added to your daily email digest and your homepage feed.
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