Nintendo Co. has forecast lower sales for its upcoming Switch 2 console, citing uncertainties regarding US tariffs.

The Kyoto-based company expects to ship 15 million units by March 2026, below the 16.8 million-unit average projected by analysts.

Despite strong pre-orders for the US$450 console, the company also estimates an annual operating profit of 320 billion yen (US$2.2 billion), which is significantly lower than market expectations.

Some analysts had anticipated it would be the fastest-selling gaming device in history. Analysts are divided over the forecast.

“Some will view this as cautious management given the risks, while others may see it as an indication of potential supply constraints,” said Pelham Smithers, managing director at Japan equity research firm Pelham Smithers Associates.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Nintendo’s cautious forecasting follows historical console transition patterns

Nintendo’s conservative 15 million unit projection for the Switch 2 mirrors a pattern seen in previous console transitions where initial supply constraints are common.

The original Switch has achieved extraordinary lifetime sales of 152.12 million units as of 2024, establishing a high benchmark that creates tremendous pressure for its successor 1.

Nintendo’s history shows dramatic variations in console performance. While the Switch and Wii (101.6 million units) were massive successes, the Wii U sold just 13.56 million units total, demonstrating the unpredictability of new hardware launches 23.

These conservative projections come despite overwhelming pre-orders, suggesting Nintendo may be deliberately managing expectations while navigating supply chain uncertainties.

Nintendo’s cautious approach could be strategic, as the company has historically preferred controlled scarcity over excess inventory, particularly during console transitions.

2️⃣ Tariff impact threatens to reshape the entire gaming hardware landscape

The uncertainty around proposed tariffs represents a significant challenge for the gaming console market, with estimates suggesting price increases of up to 69% for consoles 4.

Nintendo’s decision to delay Switch 2 pre-orders may reflect concerns about tariffs that include a 10% baseline on imports and additional tariffs on countries critical to gaming hardware production, such as Vietnam and Japan 5.