Nintendo has warned that it could increase the cost of its long-awaited new console as initial sales of the Switch 2 are expected to be lower than expected.
The Kyoto-based company expects to ship 15 million Switch 2 units in the year to March, below the average analyst estimate of 16.8 million units compiled by Bloomberg. Nintendo expects annual operating profit of 320 billion yen ($2.2 billion, approximately Rs. 18,768 crore), which is also significantly lower than expected. This is despite huge pre-orders for the $450 (approximately Rs. 38,390) device and expectations that the Switch 2 will become the fastest-selling console in history.
Executives have warned that they may raise the price of the Switch 2 in the United States, underscoring the uncertainty Nintendo faces depending on how the Trump administration’s tariffs pan out. The Japanese company currently makes most of its gaming gear in China, which is the target of Washington’s campaign to shake up global trade.
“As for U.S. pricing, it may be adjusted in the future based on market conditions,” President Shuntaro Furukawa told analysts on a conference call after Thursday’s report. He added that the company was considering the impact of tariffs on profits in the tens of billions of yen this year, according to a recording of the call reviewed by Bloomberg News.
He added that Nintendo’s first goal is to match the level of the original Switch when it debuted in 2017, when it sold around 15 million units in its first 10 months, stressing that the number did not reflect any supply constraints. Furukawa said the company also considered many factors beyond production costs and was eager to ensure strong initial momentum for the new platform.
“These forecasts are likely to divide Nintendo’s audience,” said Pelham Smithers, managing director at Japanese equity research firm Pelham Smithers Associates. “Many will think management is being cautious, knowing there is little benefit in being overly optimistic at this stage. However, there are also concerns that Nintendo may keep Switch 2 in short supply this fiscal year.”
In comments to analysts, Furukawa said the company’s goal was not a matter of any supply constraints, but rather with higher hardware prices in mind.
Nintendo is preparing for a once-in-a-decade transition from the eight-year-old Switch and reigniting growth after years of tepid profits and waning demand for the original. In the third quarter, Nintendo’s operating profit fell 46% to 35 billion yen (approximately Rs. 2,057 crore), as the company sold 10.8 million Switch consoles and 155.4 million copies of software during the fiscal year.
It comes after Switch 2 pre-orders surged, with president Shuntaro Furukawa warning that many consumers wouldn’t be able to get their hands on the new console on launch day in Japan, while many U.S. retailers were quickly selling out of orders.
What does Bloomberg say?
Nintendo’s fiscal 2026 sales and profit guidance was lower than expected, in line with consensus expectations and in line with a historically conservative stance that tariffs may have justified. Positive pre-order trends in Japan, the United States and other major markets suggest the company may hit its sales target of 15 million Switch 2 video game consoles ahead of schedule. The 45 million software units target also seems achievable, given the strong lineup of third-party games including Cyberpunk 2077 — as well as internal users who help activate or entice Nintendo’s 366 million users to upgrade.
—Nathan Naidu, Business Intelligence Analyst
In any other year, the social media buzz surrounding the Switch 2 and pre-order momentum for the console would bode well for future sales. But U.S. President Donald Trump’s tariffs and concerns that they could force Nintendo to raise prices are denting inventor sentiment.
The company, which makes most of its Switch consoles in China, has raised prices on some Switch 2 accessories and warned U.S. customers that other products could see price increases based on the tariffs imposed. The Switch 2 is already Nintendo’s most expensive console.
© 2025 Bloomberg
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