Nintendo hikes Switch 2 forecast to 19 million units
![Item 1 of 2 Nintendo Switch 2 gaming device is displayed as Nintendo starts selling the new consoles globally, at an electronics store in Tokyo, Japan June 5, 2025. REUTERS/Issei Kato [1/2]Nintendo Switch 2 gaming device is displayed as Nintendo starts selling the new consoles globally, at an electronics store in Tokyo, Japan June 5, 2025. REUTERS/Issei Kato Purchase Licensing Rights, opens new tab](/_next/image?url=https%3A%2F%2Fwww.reuters.com%2Fresizer%2Fv2%2FXXENBLWUW5MHRKWD4LVBZ3WG6U.jpg%3Fauth%3D8a585614907b2b9fc6ddef712be53dbe2443010f58a1677cc48a6e5462680557%26width%3D1200%26quality%3D80&w=1920&q=75)
News Summary
Nintendo on Tuesday hiked its sales forecast for the Switch 2 gaming device to 19 million units for the financial year ending March 2026, up from 15 million units previously. The company also raised its full-year operating profit forecast by 16% to 370 billion yen ($2.45 billion). This upward revision comes as investors have been weighing the likely strength of sales momentum for the hybrid home-portable gaming device since its June launch. Nintendo has sold 10.3 million Switch 2 units as at September-end, supported by titles including "Mario Kart World" and "Donkey Kong Bonanza." Despite the company's operating profit ratio in the first half of the year being 13.2% compared to 23.2% in the same period a year earlier, upcoming games like "Pokemon Legends: Z-A" and "Kirby Air Riders" are expected to underpin demand into the key year-end shopping period. Nintendo's shares have gained roughly 40% year-to-date, though they closed down 0.8% ahead of the earnings release.
Background
Nintendo's Switch 2 console is the successor to its highly successful hybrid home-portable Switch gaming device. The Switch line has established a significant presence in the global gaming market due to its innovation and broad appeal. The Switch 2 launched in June 2025 amidst U.S. President Donald Trump's trade war. This backdrop presented significant challenges and uncertainties for global supply chains, particularly for electronics manufacturers, testing Nintendo's supply chain management capabilities within a complex international trade environment.
In-Depth AI Insights
Does Nintendo's hiked Switch 2 sales forecast imply it has successfully navigated the challenges of Trump's trade war and developed a more optimistic outlook on market demand? - Yes, the upward revision suggests Nintendo has effectively managed potential supply chain disruptions linked to the trade war during the product's launch, demonstrating strong operational resilience. - Despite an initial dip in operating profit margins, the company's increased profit forecast may reflect confidence in future cost controls and/or economies of scale from higher sales volumes. - Selling 10.3 million units in a short period, coupled with strong game releases, indicates robust consumer demand that likely exceeded initial, more conservative expectations. Given the Switch 2's launch amidst Trump's trade war, how might this influence investor perception of Nintendo's resilience against future macroeconomic and geopolitical risks, particularly with his ongoing incumbency? - Investors might view Nintendo's successful navigation of the trade war as evidence of its capability to perform well in similar future macroeconomic challenges, boosting confidence in its management's risk-handling abilities. - However, with potential for continued or escalated protectionist policies from the Trump administration, investors will likely scrutinize Nintendo's manufacturing footprint diversification strategies and its pricing and distribution approaches in key global markets like the US and China to mitigate potential tariff and non-tariff barriers. - In this scenario, Nintendo may seek to further optimize its global supply chain layout, for example, by increasing production capacity in regions less prone to potential conflicts, to reduce the impact of political risks on operations. Nintendo's shares have gained 40% year-to-date, but closed down ahead of the earnings release. Does this signal deeper market concerns about the Switch 2's long-term growth prospects? - The share price dip could be a classic "buy the rumor, sell the news" reaction, especially after a significant year-to-date rally, as investors may have taken profits following the earnings announcement. - While sales forecasts were raised, the decline in H1 operating profit margin (from 23.2% to 13.2%) might have triggered concerns about initial hardware profitability or higher marketing/production costs, even if such a dip is common in a new product cycle. - This stock movement could also reflect underlying market uncertainty regarding the Switch 2's ability to replicate the immense success of its predecessor and the sustained appeal of its new game titles in a highly competitive gaming market over the long term.