Nintendo keeps Switch 2 forecast unchanged despite hot start
The Kyoto-based company said on Friday that it still expects to sell 15 million units of its next-generation hardware by March, maintaining what's widely seen as a conservative view. The company said that new U.S. tariffs did not have a significant impact on its forecast.
The record-setting pace of early sales of the Switch 2 more than doubled Nintendo's revenue in the June quarter. Operating profit in the period was ¥56.9 billion ($378 million), beating the average of analyst estimates. Nintendo sold 8.67 million copies of games for the Switch 2, with marquee launch title Mario Kart World drawing more than 5 million sales through the end of June.
Released on June 5, the $450 Switch 2 got off to a sizzling start in key markets. It set new highs for global sales and reversed a decline in spending on video game hardware in the United States. Nintendo is now ramping up production, saying that demand for its new console exceeds supply in many countries.
New tariffs introduced by the U.S. government may hamper the profitability of Nintendo's hardware lineup over the coming months, even with the company downplaying their impact on outlook. The Japanese entertainment giant ships most of its U.S.-bound machines from Vietnam and those will be subject to a 20% levy under the tariff regime of U.S. President Donald Trump's administration. Nintendo President Shuntaro Furukawa has said the company may have to raise prices, depending on the situation.
"We expect the overall hardware segment to fall into operating loss' once the 20% tariff kicks in, UBS Securities analyst Yijia Zhai wrote in a report. "From the next fiscal year onward, there is a possibility that the price of the Switch 2 may be raised.'
Sustaining the strong early momentum into this year's holiday shopping season won't be easy, especially with the Switch 2 being the most expensive piece of hardware Nintendo has ever sold, according to earlier comments from Furukawa. The company will strengthen its lineup of Switch 2 games next quarter with Pokémon Legends: Z-A, which will be available on Oct. 16.
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