Trump's tariffs may hit Nintendo Switch 2 sales

DFC Intelligence has revised its 2025 global sales forecast for Nintendo’s Switch 2 console, lowering the projection to 15 million units from an earlier estimate of 17 million.

This adjustment, announced on Apr. 8, 2025, reflects concerns over tariffs imposed by the US government.

The tariffs include a 46% levy on goods from Vietnam, creating uncertainty across various industries.

Following the tariff announcement, Nintendo has postponed preorders for the Switch 2 in the US indefinitely.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Gaming industry demonstrates repeated vulnerability to trade tensions

This isn’t the first time tariffs have threatened console prices and availability. In 2019, Nintendo, Sony, and Microsoft took the unusual step of joining forces to write a joint letter opposing proposed 25% tariffs on gaming hardware, warning of “disproportionate harm” to the industry1.

Their concerns were well-founded, with 96% of consoles manufactured in China at that time. The companies estimated consumers would pay an additional $840 million for the same products2.

The industry has consistently warned that console manufacturers operate on slim margins, meaning tariff costs are passed directly to consumers, potentially pricing out many families from purchasing consoles3.

These trade tensions explain why Nintendo began moving production to Vietnam years ago. However, the company faced challenges when new tariffs specifically targeted Vietnamese goods at 46%4.

The immediate market reaction shows investors recognize these risks. Nintendo’s stock fell 7.35%, and Sony’s dropped 10.16% following the tariff announcements, reflecting uncertainty about future pricing and demand5.

2️⃣ Supply chain diversification provides limited protection in expanding trade wars

Nintendo’s current production challenges highlight how difficult it is to insulate from trade tensions that target multiple countries simultaneously.

The company began shifting Switch production to Vietnam in 2019 specifically to mitigate tariff risks from China, with over half of US-bound hardware now coming from Vietnam6.

In January alone, Nintendo exported 383,000 Switch units from Vietnam to the US as part of this strategy6, but this carefully developed supply chain diversification is now threatened by new tariffs targeting Vietnamese goods.