The new Nintendo Switch 2 has exceeded expectations. Launched in June 2025, it has already sold over 10 million units worldwide in just a few months and prompted Nintendo to raise its full-year hardware forecast from 15 million to 19 million units. The company also lifted its software unit target to 48 million and increased total sales and profit forecasts accordingly. With supply meeting demand in major regions, this console rollout promises to reshape Nintendo’s performance for the year.
Nintendo raised its full-year forecasts for group operating profit, net profit, and sales, underpinned by the strong early performance of its Switch 2 console. Operating profit is now forecast at ¥370 billion (US$2.4 billion), up from ¥320 billion; net profit is revised to ¥350 billion from ¥300 billion; and sales are projected at ¥2.25 trillion versus the prior estimate of ¥1.9 trillion. Concurrently, Nintendo expects Switch 2 hardware sales of about 19 million units in the year ending March, up from 15 million previously, while software titles tied to the unit are projected at 48 million, up from 45 million.
The console launched in June 2025 and recorded hardware sales of 10.36 million units in the April–September first half, with distribution across Japan (2.35 million units), the Americas (3.68 million), and Europe (2.40 million). Early metrics suggest increased engagement and a broader array of genres being played on the platform.
The Switch 2’s upgraded hardware (improved screen, processor, hybrid form factor) positions Nintendo to capture users who delayed upgrading and to attract new users in growth markets. The console’s strong early uptake and raised sales forecasts indicate robust demand, giving Nintendo volume leverage and potentially improved margins over time through economies of scale. Expansion into Southeast Asian markets (for example Singapore, Thailand, and the Philippines), alongside new regional offices, supports organic growth outside traditional strongholds. The broader ecosystem effect—strong hardware attach rates and increased software catalog—may enable better monetization of titles, more third-party participation, and higher recurring content spend. Lastly, the raised forecast signals confidence to investors and may support continued investment in exclusive titles and platform upgrades.
Despite promising momentum, Nintendo faces risks. Macroeconomic pressures—most notably US tariffs on goods produced in Vietnam (where the Switch 2 is manufactured via outsourced partners)—are expected to reduce profits by “tens of billions of yen.” Competitive pressure remains elevated, particularly from other consoles and mobile platforms vying for consumer spend. Software pipeline richness remains key: If third-party support does not scale or if staples of first-party IP falter, the platform’s growth may slow. The high hardware target (19 million units) implies elevated production commitments; any supply chain issues or inventory misalignments could reduce margin or lead to discounting risks. Also, sustaining momentum beyond the launch wave into the holiday season and subsequent years will be essential; if demand decays prematurely, future forecasts may be jeopardized.
What do we think?
Our view is that Nintendo is favorably positioned in the near-term with the Switch 2. The combination of improved hardware, increased regional rollout, and revised upward sales estimates suggests the company is gaining traction. We estimate that if Nintendo maintains software momentum and manages cost headwinds (especially tariffs), it can deliver its newly stated targets and potentially exceed them. However, we remain cautious about margin erosion from import tariffs, potential slower uptake in mature markets, and the challenge of converting early launch demand into sustained growth. We accordingly assign a moderate-to-positive outlook: Nintendo has a tangible upside if execution is solid, but meaningful risk remains if one of the key growth drivers falters. Investors should monitor production efficiency, software attach rates, regional sales mix, and tariff/cost exposure.
WHAT DO YOU THINK? LIKE THIS STORY? TELL YOUR FRIENDS, TELL US.