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After estimating lower-than-expected Switch 2 early sales, Nintendo cautioned that the price of its much-anticipated new system might rise further.
The Kyoto-based business anticipates Switch 2 shipments to total 15 million units in the fiscal year ending March 31, falling short of Bloomberg's average of 16.8 million analyst projections. Nintendo projected an annual operating profit of JPY 320 billion ($2.2 billion or nearly Rs. 18,768 crore), which fell substantially short of expectations. That was despite massive pre-orders for the $450 (approximately Rs. 38,390) device and market hopes that the Switch 2 would be the fastest-selling console in history.
To highlight the uncertainty, Nintendo officials have warned that if Trump administration tariffs are implemented, they may raise pricing for the Switch 2 in the United States. The Japanese corporation now manufactures the majority of its gaming gadgets in China, a focus of Washington's attempt to disrupt global commerce.
"As for pricing in the US, there is a possibility that adjustments may be made in the future depending on market conditions," President Shuntaro Furukawa told investors on a teleconference following the report on Thursday. According to a call tape seen by Bloomberg News, the business expects a tariff effect on profit of tens of billion yen this year.
Nintendo's initial goal is to match the original Switch's debut in 2017, when it sold around 15 million devices in its first ten months, he continued, emphasizing that the figure does not account for any supply problems. Furukawa stated that the business is considering numerous things in addition to production costs in order to assure strong initial momentum for the new platform.
"These forecasts are probably going to split the Nintendo-watching audience," said Pelham Smithers, managing director of the Japan stock research company Pelham Smithers Associates. "You'll have a significant chunk who believe management is being cautious, recognizing that there's no benefit in being overly optimistic at this point. However, others may be concerned that Nintendo may want to keep the Switch 2 in limited supply throughout the fiscal year.
Furukawa told analysts that the company's ambitions were not affected by supply restrictions and that it was considering increasing hardware prices.
Nintendo is preparing for a once-in-a-decade transfer, transitioning away from the eight-year-old Switch and resuming growth after years of sluggish profitability and declining demand for the original. In the March quarter, Nintendo's operating profit decreased 46 percent to JPY 35 billion (approximately Rs. 2,057 crore), capping a fiscal year in which the firm sold 10.8 million Switch systems and 155.4 million software copies.
The profits come after the Switch 2 had a surge in pre-orders, prompting President Shuntaro Furukawa to warn that many Japanese consumers will not be able to purchase the new system on its release day, while orders immediately sold out at many US outlets.
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In any other year, the significant social media excitement around the Switch 2, along with the console's pre-order momentum, would indicate a strong sales outlook. However, US President Donald Trump's tariff policies, and concerns that they would compel Nintendo to hike costs, are dampening inventor sentiment.
The company, which manufactures the majority of its Switch consoles in China, has raised the price of some Switch 2 accessories while warning customers in the United States that pricing on other goods may rise depending on tariffs imposed. The Switch 2 is already Nintendo's priciest system.
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