Nintendo gives conservative sales outlook for Switch 2 amid tariff concerns
The Kyoto-based company expects shipments of the long-awaited Switch 2 to reach 15 million units in the year to March, shy of the 16.8 million average estimated by analysts.
Nintendo forecast its annual operating profit to reach ¥320 billion ($2.2 billion) during the period, also significantly short of analyst expectations. That is despite overwhelming preorders for the $450 gadget and market expectations that the Switch 2 would be the fastest-selling console in history. In Japan, the console will sell for ¥49,980 ($350), though an edition that supports only the Japanese language.
Nintendo is gearing up for a once-in-a-decade handover, moving on from the eight-year-old Switch and rekindling growth following years of tepid earnings and waning demand for the original console. In the March quarter, Nintendo's operating profit fell to ¥35 billion, concluding a fiscal year in which the company sold 10.8 million Switch consoles and 155.4 million copies of software.
The earnings follow surging preorders of the Switch 2 that prompted Nintendo President Shuntaro Furukawa to warn that many consumers won't be able to get the new console on the release date in Japan, while orders quickly sold out at many U.S. retailers.
In any other year, the considerable social media buzz around the Switch 2, along with the console's preorder momentum, would suggest rosy sales ahead. But U.S. President Donald Trump's tariff policies and fears that they may force Nintendo to raise prices are denting inventor sentiment.
The company, which produces the bulk of its Switch consoles in China, has lifted the price tag on some Switch 2 accessories, and warned customers in the U.S. that prices may rise on other products depending on the tariffs imposed. The Switch 2 is already Nintendo's most expensive console.
The company behind the Super Mario and Zelda franchises is shifting some production to other countries such as Vietnam. But the unpredictability of U.S. tariffs remains, with concerns growing that U.S. tariffs on foreign-made movies and software products might also apply to game titles. The additional cost for consumers may sap demand for Nintendo consoles and spur them to seek more powerful offerings from rivals Sony and Microsoft or seek games by U.S. publishers that are playable on PCs.
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