* Nintendo ( NTDOF ) says component prices, tariffs adding to costs

* Higher costs reflected in Switch 2 price hike decision

* Both companies' shares have slid in recent months

* Sony ( SONY ) to buy back up to $3.2 billion of shares

* Sony ( SONY ) sees high memory prices continuing next year

By Sam Nussey

TOKYO, May 8 (Reuters) - Nintendo ( NTDOF ) and Sony ( SONY )

both flagged the impact from surging memory prices on

their games businesses on Friday, as the artificial intelligence

boom constrains chip supply and deepens disruptions across the

tech sector.

Memory chip prices doubled in the first quarter alone from

the previous quarter and are forecast to climb up to 63% in the

current quarter due to AI data centre demand that has impacted

supply for smartphones, laptops and automobiles.

While top producers Samsung, SK Hynix

and Micron have pledged to boost output with

billions of dollars of investment, it takes at least a year for

a new production line to come online, experts say.

"Super Mario" maker Nintendo ( NTDOF ) said that higher component

costs, particularly memory, and the impact of tariffs is

expected to add roughly 100 billion yen ($638 million) to costs

in the current financial year.

"The very fact that Nintendo ( NTDOF ) felt compelled to act (price

increase) suggests the rise in memory costs has become severe

enough that it could no longer be absorbed internally - and,

crucially, that there is little prospect of those cost pressures

easing in the near term," Morningstar analyst Kazunori Ito said.

"This decision likely reflects a sober assessment that

waiting for market conditions to improve is not a viable

option."

President Shuntaro Furukawa said the higher component costs,

along with factors including exchange rates, were reflected in

Nintendo's ( NTDOF ) decision to hike prices of its Switch 2.

The price of a Japanese language Switch 2 Japan model will

go up by 10,000 yen to 59,980 yen, with the gaming device in the

U.S. to cost $50 more at $499.99.

With the price hikes, profitability will be roughly

unchanged from last financial year, Furukawa told an earnings

briefing.

Sony ( SONY ) announced in March it would increase prices of the PS5,

with the standard version of its gaming device jumping $100 to

$649.99 in the U.S.

NINTENDO USERS SEEN AS PARTICULARLY PRICE SENSITIVE

For Nintendo ( NTDOF ) the hikes have risks as the Switch 2 is early

in its lifecycle and its casual user base is particularly price

sensitive, said Serkan Toto, founder of the Kantan Games

consultancy.

"Nintendo ( NTDOF ) is now under more pressure than ever to get more

first-party blockbusters out this fiscal year" to boost demand

for the system, Toto said.

The firm's games pipeline is seen as thin, although it has

scored a recent hit with "Pokemon Pokopia" and upcoming titles

include "Star Fox".

Nintendo ( NTDOF ) also hiked prices of its older Switch and online

gaming services and said its playing cards will move from a

listed price to an open price set by retailers.

The company expects to sell 16.5 million Switch 2 units this

year, compared to 19.9 million units last year, and 60 million

software units.

Sony ( SONY ) and Nintendo's ( NTDOF ) shares have been under pressure in

recent months as investors fret about the impact of disruption

to supply chains from the AI boom and Iran war on electronic

manufacturers' margins.

Sony ( SONY ), which plans to spend up to 500 billion yen buying back

shares, said it sees lower sales but higher profits at its

gaming business this financial year.

Sony ( SONY ) has secured memory supply for this financial year but

prices are expected to continue to be high next year, CEO Hiroki

Totoki told an earnings briefing.

The company is looking at ways to reduce costs outside of

memory, he said.

PS5 hardware sales are based on the amount of memory Sony ( SONY )

can secure at "reasonable prices", with hardware profitability

expected to be similar to a year earlier.

With the PS5 in its sixth year on the market, the profit

forecast incorporates investment in Sony's ( SONY ) next-generation

platform.

Sony ( SONY ) is expected to receive a major boost from the launch of

Take-Two Interactive's delayed "Grand Theft Auto VI",

which is scheduled for release in November.

"Sony's ( SONY ) bottom line stands to benefit significantly from the

high-margin software sales and ecosystem engagement this launch

should trigger," Amir Anvarzadeh of Asymmetric Advisors wrote in

a note.

($1 = 156.7000 yen)