Nintendo on Thursday said it would sell 15 million units of the Switch 2 console in the current financial year, but the outlook may seem conservative, likely due to unpredictability of US tariffs that could impact its bottom line.
This is the first time Nintendo has publicly forecast how many units of the Switch 2 it plans to sell. The Switch 2, the successor to the Switch—the third best-selling console in history—will hit the market on June 5.
Over the years, Nintendo has diversified its offerings into movies and theme parks, but 90 per cent of its revenue still comes from the video game business. However, analysts warn that Nintendo has given a more cautious Switch 2 sales outlook than expected, with many estimating sales to reach 16.8 million units.
The original Switch, launched in 2017, was a surprise hit, thanks to its hybrid form factor that allows consumers to play games in handheld mode or connect the console to a TV like a traditional system. Nintendo has managed to sell over 150 million units of the Switch since its launch.
For the financial year ended March 31, Nintendo reported a 43.2 percent fall in net profit to 278.8 billion yen ($1.9 billion), which was expected as consumers eagerly await the Switch 2. Nintendo forecast a net profit of 320 billion yen ($2.2 billion) for the current financial year but warned that US tariffs could impact its earnings.
Investors are closely watching how the Switch 2 will perform in the market when it launches next month. The Switch 2 will be priced at $449.99—a steep $150 increase over the original Switch, which launched at $300. First-party titles will also cost more, with the flagship game Mario Kart World priced at $80.
Nintendo is launching a new video game console amid concerns over US tariffs, as many tech companies scramble to respond to shifts in global trade triggered by Washington’s trade policies. The US is Nintendo’s largest global market, accounting for 40 per cent of its revenue. However, Nintendo is more vulnerable than some rivals, given that it imports all of its consoles to the US from Asia, where it manufactures most of its hardware.
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Preorders for the Switch 2 went live earlier in other countries, but Nintendo cancelled the original April 9 preorder window for the US market to assess the potential impact of the tariffs. The company has since resumed taking US preorders for the console, while keeping the price at $450. Meanwhile, rivals including Microsoft and Sony have raised console prices in certain markets, as uncertainty continues over the impact of tariffs on device costs.
Nintendo has seen higher-than-expected demand for the Switch 2 based on early interest in Japan and the US, two of its key markets. Experts say the Switch 2 could become the fastest-selling console, but many are also questioning whether the veteran gaming company has enough units available to meet the overwhelming demand.
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