Nintendo Faces Trade War Headwinds Ahead of Switch 2 Launch
- tech360.tv
- 4 hours ago
- 2 min read
Nintendo is preparing to launch its highly anticipated Switch 2 console on June 5, but escalating trade tensions threaten to complicate one of the year’s biggest tech releases.
The Japanese gaming giant, known for franchises like Super Mario and Donkey Kong, is navigating a volatile trade environment as it aims to maintain the Switch 2’s USD 449.99 price tag.
The launch comes eight years after the original Switch, which sold 150 million units and defied predictions of a console market decline.
Nintendo announced the Switch 2’s price and release date on April 2, the same day U.S. President Donald Trump introduced sweeping import tariffs.
The company paused U.S. pre-orders to assess the impact of the tariffs before confirming that pre-orders would begin on April 24 with no change in pricing.
To offset potential costs, Nintendo raised prices on some accessories and warned that further adjustments could follow depending on market conditions.
Serkan Toto, founder of Kantan Games consultancy, said the accessory price hikes would only partially cushion the impact of tariffs.
Nintendo’s supply chain strategy includes sourcing from Vietnam and Cambodia, rather than relying solely on China, which faces 145% tariffs on goods entering the U.S.
Vietnam and Cambodia have also been targeted with tariffs, though those levies have been paused for 90 days.
Robin Zhu, an analyst at Bernstein, said Nintendo plans to supply the U.S. from Vietnam and Cambodia under normal demand assumptions.
The Americas accounted for 44% of Nintendo’s sales in the financial year ending March, making the U.S. a critical market.
Jay Defibaugh, an analyst at CLSA, said Nintendo may have to absorb tariffs of up to 49% in Cambodia and 46% in Vietnam if they are reinstated.
Ampere Analysis projects 4.6 million Switch 2 units will be sold in the U.S. in 2025, out of 13.2 million units globally.
Piers Harding-Rolls of Ampere Analysis said he does not expect the trade war to affect momentum in North America.
Analysts noted that while hardcore fans are likely to buy the Switch 2 regardless of price, higher costs could deter casual gamers.
The Switch 2’s price represents a 50% increase over the original model, and new software like Mario Kart World is priced at USD 79.99.
Some analysts believe the higher price already accounts for trade war uncertainties.
Defibaugh said Nintendo has extensive experience managing supply chains, which could help mitigate disruptions.
Despite the rise of mobile gaming and tech giants entering the space, Nintendo and Sony remain dominant in the console market.
Sony recently raised PlayStation 5 prices in Europe and Britain, with analysts predicting similar moves in the U.S.
The Switch 2 will feature a larger screen and improved graphics, offering continuity from its predecessor.
Harding-Rolls said there is strong demand for a more powerful Switch experience.
Nintendo to launch Switch 2 on June 5 at USD 449.99
Trade tariffs threaten to impact supply chain and pricing
U.S. accounts for 44% of Nintendo’s annual sales
Source: REUTERS