Tokyo (AFP) – Japanese gaming giant Nintendo forecast Thursday that it would sell 15 million units of its hotly awaited Switch 2 console in the current financial year but warned US tariffs could hit its bottom line. The successor to the Switch — the third best-selling console ever behind Sony’s PlayStation 2 and the Nintendo DS — is set to hit shelves worldwide on June 5.
While the “Super Mario” maker is diversifying into theme parks and hit movies, around 90 percent of its revenue still comes from the Switch business, analysts say. However, the unit sales forecast is more conservative than the 16.8 million expected in a survey of Bloomberg economists. The Switch, a handheld and TV-compatible device that became a must-have gadget during pandemic lockdowns, has sold around 150 million units since its launch in 2017.
For the financial year that ended on March 31, Nintendo reported a 43.2 percent fall in full-year net profit to 278.8 billion yen ($1.9 billion), as gamers wait to splash their cash on the Switch 2. It sold 10.8 million Switches, down 31.2 percent year-on-year, while software sales hit 155.4 million units, a decrease of 22.2 percent. Nintendo forecast a net profit of 300 billion yen for the current financial year but warned that US trade tariffs could impact its earnings.
“Changes to tariff rates may affect our financial forecast. We will continue to monitor the situation to respond to changes in market conditions,” it said.
– Hot pre-orders –
The company last month revealed details about the Switch 2, a hybrid console like its predecessor. However, the price has raised eyebrows at over a third more than the original Switch in major markets, including the United States, where it will cost $449.99. A Japanese-only version for domestic consumers will cost 49,980 yen ($350).
Nintendo delayed pre-orders for the Switch 2 in the United States by two weeks as it assessed the fallout from President Donald Trump’s trade levies. But last month it boasted of higher-than-expected demand in Japan for pre-orders of the new console.
“If final tariffs do not come down… then prices will need to rise further, which will dampen demand,” David Gibson of MST Financial told AFP ahead of the earnings release. “But keep in mind Nintendo tends to set the price of its hardware and not change them,” he said. Since Trump’s first term, Nintendo has been shifting production from China to Vietnam, Gibson said. “So it is likely that 70 percent plus of shipments to the USA for Switch 2 can come from Vietnam and tariffs can be minimized.”
The Switch 2 will have eight times the memory of the first Switch and a 7.9-inch (20-centimetre) screen — up from 6.2 inches for the original. Its controllers, which attach with magnets, can also be used like a desktop computer mouse. A new function will enable users to temporarily share games with friends and play together.
News that the next title in the Grand Theft Auto video game series had been postponed to May 2026 is a positive for Nintendo, Atul Goyal of Jefferies said this month. “It sure makes Nintendo’s competition far less intense” in terms of game launches, he wrote in a note. “We earlier wrote that the 2025 holiday season could belong to both Sony (GTA6) and Nintendo (Switch 2 games),” he said. “But it now looks that the console for this holiday season is” the Switch 2, he predicted.
© 2024 AFP
