As PlayStation prepares to embrace an all-digital future starting in 2028, Nintendo is seen as one of the last bastions of physical games with its Switch cartridges. A new challenge has emerged: one of Nintendo's major ROM chip manufacturers, Macronix, is preparing to exit the market and shift its focus to the more lucrative flash and memory chip market.

In its latest earnings call (via MST Financial analyst David Gibson), Macronix revealed it plans to drop ROM manufacturing entirely. The company says ROM chips account for only 5% of its business, down from 26% a year ago. While Macronix isn't the only company that manufactures ROM chips for Nintendo, it is a major supplier overall, and losing it could put further pressure on the company and other game publishers to ship more games on Game-Key Cards, or increase prices for cartridges that do have full games installed.

ROM chips--which stand for Read-Only Memory--are specialized storage chips that data is permanently written to. The great thing about them is that they let games load quickly, since a console can read the game code straight off the chip without first installing data to an internal storage drive. Nintendo's proprietary game cards rely on specialized, high-speed ROM tech tailored specifically for Nintendo hardware.

Because of that design, they have high manufacturing costs and only a handful of silicon suppliers--including MegaChips and ROHM--manufacture them for Nintendo. This, in turn, affects publishers' profit margins, which is why Game-Key Cards on Switch 2 are a popular alternative.

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