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Nintendo raised the price of its Switch 2 console across major markets and issued a downbeat financial outlook for the fiscal year ending March 2027, as surging memory chip costs and tariff headwinds weigh on the company's bottom line.
The price of the Switch 2 in the U.S. will rise by $50 to $499.99, effective Sept. 1. In Japan, the price climbs ¥10,000 to ¥59,980 starting May 25, and in Canada the console will cost $679.99, up from $629.99. In Europe, the price on My Nintendo Store rises to €499.99 from €469.99. Nintendo cited "changes in market conditions" and the "global business outlook" for the revisions, which the company said are expected to persist over the medium to long term.
Nintendo projected revenue of 2.05 trillion yen for the current fiscal year, 11.4% below the prior year and well short of analyst expectations of 2.46 trillion yen, according to CNBC. Net profit is forecast to contract 27% to 310 billion yen, against analyst estimates of 418.5 billion yen. Operating profit guidance of ¥370 billion landed about ¥110 billion beneath analyst consensus, according to Bloomberg. Nintendo said it expects a ¥100 billion impact on its business from memory prices and U.S. tariffs combined.
Console sales projections also disappointed. Nintendo forecast 16.5 million Switch 2 units for the current fiscal year, a step back from the 19.86 million sold in the year just concluded. Software sales across the original Switch and Switch 2 are projected to total 165 million units, an 11% decline from the prior year.
"Nintendo is predicting Switch 2 hardware sales to go down this fiscal year — instead of going up as it usually is the case with new consoles," Serkan Toto, CEO of Kantan Games, told CNBC. Toto expressed confidence that the figures understate likely performance, arguing that consumers tend to accept price increases once they become accustomed to them.
Global demand for memory chips has been driven upward by the boom in AI infrastructure investment, raising production costs for devices like the Switch 2. The price increase follows a similar move by Sony, which raised PlayStation 5 prices by as much as $150 in March.
Calling Nintendo's projections "overly conservative," Morningstar analyst Kazunori Ito also questioned the rationale behind the software forecast. "Why would Nintendo issue guidance for declining software sales when they should be ramping up user activity in the console's crucial second year?" Ito told Bloomberg. By Morningstar's own estimates, the Switch 2 will move 19 million hardware units and 205 million software units over the course of the fiscal year, comfortably ahead of what Nintendo is projecting.
Investor anxiety has also been stoked by the relatively sparse cadence of new game releases following the Switch 2's June launch. "Nintendo's first-party pipeline remains the key," Bernstein analyst Robin Zhu told Bloomberg. According to Toto, an announcement of Nintendo's 2026 software slate via a Nintendo Direct event may arrive within weeks.
In Tokyo trading, Nintendo shares dropped 8.4%, touching their lowest level since August 2024. Year-to-date losses have now exceeded 30%, marking the stock's worst annual stretch in roughly ten years, according to Bloomberg.