The U.S. pause in imposing the toughest tariffs in a century has given Nintendo valuable time to prepare for a major launch of its new console and eased pricing pressure. at present.
A 90-day reprieve from tariffs on most U.S. trading partners gives Nintendo an opportunity to increase shipments of its upcoming Switch 2 console to a market that accounts for more than a third of its sales. About a third of Switch 2 units are assembled in Vietnam – which was already subject to 46% tariffs but now faces only the 10% general tariffs imposed by Donald Trump’s administration – so Nintendo can focus all production in the United States and stockpile as many devices as possible over the next three months. That period includes the device’s June 5 launch date.
Shares of the Kyoto-based game maker rose 10% at the open in Tokyo on Thursday, signaling the emphasis on the debut. The company has no plan B other than the $450 (roughly Rs. 38,500) Switch 2, which will soon become a key platform for its popular gaming series. Nintendo is diversifying its business to better leverage its rich library of intellectual property and beloved characters through movies, merchandise and theme parks, but to do so it must have a thriving platform and an ever-expanding user base.
“If the tariffs stay at 10%, Nintendo will probably keep the pricing at $450 and margins will only be affected,” said Robin Zhu, an analyst at Bernstein. “At 46% Vietnam tariffs, I would expect them to raise it by $50 to $100.”
Nintendo has delayed U.S. pre-orders to fully assess the impact of the new tariffs – which were announced just hours after a Nintendo Online event revealed Switch 2 price and revealed the game lineup. The company spent months strategizing the console’s global launch and making sure the first batch of consoles was aimed at gamers rather than scalpers. In the UK, for example, it will prioritize customers who have a Switch Online membership and plenty of gaming time on the Switch.
The initial release window is a pivotal moment for consoles, much like a movie premiere. It sparks interest beyond loyal users and sets up a big headline for a quick launch. Sony Group’s PlayStation 5 was released in late 2020 and took several years to gain momentum due to the impact of the pandemic on logistics and availability. Nintendo may now face similar challenges shipping its devices out of Vietnam, which is also home to other major U.S. exporters such as Nike and Adidas. Although Vietnam and the United States have begun negotiations to head off rising tariffs, most companies are likely to speed up deliveries to the United States to maximize shipments within 90 days.
As part of Trump’s plan to lift country-specific tariffs on most other countries on Wednesday, U.S. tariffs on Chinese imports increased to 125%. This prevents Nintendo from shipping its products made in China to the United States and poses a challenge to its competitors.
“We think the Switch 2’s bill of materials is around $400, which means Nintendo will still sell the console at a loss with the 10% tariff in the U.S., but the loss will be something Nintendo can afford,” said Toyo Securities’ Hideki Yasuda. “Sony is in a tougher position as most of its PlayStation production is in China and may be forced to raise the price of PS5 in the U.S. in the near future.”
PC makers showed one way to deal with first-quarter tariff uncertainty by stockpiling inventory in the United States and eliminating discounts. Nintendo plans to only sell the Switch 2 version priced below $350 (roughly Rs. 30,114) in Japan, and it may go to great lengths to avoid further price hikes.
The price of the Switch 2 has increased compared to the original Switch, and Nintendo has also announced the launch of its first $80 console game, Mario Kart World. The company faces the burden of convincing players to spend more on devices and software, which are driven up by rising production costs.
The threat of U.S. tariffs is still looming, but now at least the situation for the Switch 2 launch window is clearer. That brought Nintendo’s shares in Tokyo trading back to within 1% of where they were before Trump’s Liberation Day speech, which reverberated across global markets.
© 2025 Bloomberg
