This optimistic outlook comes as Nintendo gears up for the Switch 2's planned launch on June 5th, a release that will test the company's supply chain management capabilities amidst the ongoing trade tensions, particularly those involving potential tariffs from the United States under President Donald Trump.
The Switch 2 is the successor to the immensely successful Nintendo Switch, which has sold over 150 million units since its debut in 2017. The original Switch revitalized Nintendo's fortunes after the commercial disappointment of the Wii U.
Serkan Toto, founder of Kantan Games consultancy, offered a more bullish perspective, stating, "Nintendo clearly wants to play it safe and chose what is a cautious but probably reasonable forecast." Toto anticipates that Switch 2 sales could reach closer to 20 million units in its initial year. Nintendo has a reputation for issuing conservative financial forecasts.
The company had previously paused the commencement of US pre-orders for the Switch 2 as it evaluated the potential impact of escalating US tariffs. Nintendo later announced its decision to maintain the pricing at US$449.99.
During an earnings briefing, Nintendo President Shuntaro Furukawa addressed the tariff concerns, stating, "If additional tariffs are imposed in the future and we adjust the price, we may see a decrease in demand." He further indicated that Nintendo anticipates a profit reduction in the tens of billions of yen due to these tariffs and will revise its forecasts should the situation evolve.
While Nintendo has expanded its reach into other entertainment avenues, including the opening of retail stores and the featuring of its iconic characters in theme parks and films, the company remains significantly reliant on its console business.
For the fiscal year concluded in March 2025, Nintendo reported an operating profit of ¥282.5 billion, representing a 46.6 per cent decrease compared to the previous year.
Looking ahead, Nintendo projects Switch 2 software sales to reach 45 million units in the current financial year. The new hybrid home-portable console is slated to launch with compelling titles, including "Mario Kart World," which is expected to drive initial adoption.
Concurrently, Nintendo anticipates selling 4.5 million units of the aging but still popular original Switch and 105 million software units for that system during the same financial year.
Early indicators suggest strong consumer interest in the Switch 2, which boasts enhanced processing power, a larger screen, and improved graphics compared to its predecessor. This positive reception comes at a time when rival console manufacturers Microsoft (Xbox) and Sony (PlayStation) have both recently increased the prices of their gaming consoles.
Nintendo's ability to maintain its launch price despite potential tariff headwinds could give it a competitive advantage in the market.