Nintendo Gears Up for Highly Anticipated Console Release
The company is preparing to launch its much-anticipated Nintendo Switch 2 gaming console in a challenging economic climate, as global trade tensions continue to escalate. The company hopes that adjustments in its supply chain will help mitigate the impact of potential U.S. tariffs while positioning the new device for success.
Set to unveil key details on April 2, the Japanese gaming giant is expected to reveal major features of the Switch 2 on the same day former U.S. President Donald Trump plans to announce fresh “reciprocal tariffs” on international trading partners. One of the most crucial aspects of the launch—the console’s retail price in the U.S.—could be directly affected by these trade policies.
The original Switch console, released in March 2017, revolutionized gaming with its hybrid design, blending handheld and home console features. Selling over 150 million units worldwide, the device helped drive Nintendo’s stock value significantly upward. Now, with the launch of the Nintendo Switch 2, featuring a larger display and enhanced processing power, Nintendo is banking on its dedicated fan base to drive strong sales of the next-generation console and its accompanying game lineup.
Nintendo’s Shift in Manufacturing Strategy
While the launch event will be filled with excitement and fanfare, Nintendo’s underlying business strategy has undergone a significant transformation. Since the first Trump administration signaled its intention to disrupt global trade systems, Nintendo has strategically moved much of its production away from China. Analysts and import data now indicate that a majority of Nintendo’s hardware bound for the U.S. is produced in Vietnam and Cambodia.
Robin Zhu, an analyst at Bernstein, emphasized the importance of this shift, stating, “The expansion of new assembly operations in Southeast Asia could be crucial for ensuring an adequate supply of Switch 2 units during the 2025 holiday season, which is key to its success this year.”
Data suggests that hundreds of thousands of Switch 2 units have already been shipped from Vietnam to the U.S. since early 2024. MST Financial analyst David Gibson noted that in January alone, 383,000 finished Nintendo Switch 2 consoles were sent from Vietnam to U.S. distribution facilities. Gibson speculated that this was a strategic move by Nintendo to test its supply chain and mitigate potential risks associated with new tariffs. He expects shipment volumes to have increased significantly in February and March.
Tariff Risks and Nintendo’s Pricing Strategy
Nintendo is not the only gaming company bracing for the impact of new trade policies. PlayStation manufacturer Sony has also been stockpiling inventory in the U.S. ahead of potential tariff changes. However, given the imminent release of the Switch 2, Nintendo is particularly vulnerable to shifts in U.S. trade policy.
Despite this uncertainty, Nintendo’s stock has risen by nearly 25% in 2024, including a 5.3% surge following Goldman Sachs’ recent “buy” rating. Analysts anticipate the company will aim for at least 10 million unit shipments in the first year.
Pricing remains a critical factor in the console’s success. While some analysts believe Nintendo will simply set a price and adjust as necessary based on tariff developments, others predict the company will include a buffer to accommodate potential trade changes. Gibson highlighted that Vietnam’s export data lists the unit cost for customs duties at $338, leading to speculation that the final retail price will be $399, excluding games but incorporating a safety margin.
For comparison, the original Nintendo Switch launched in the U.S. in 2017 with a price of $299.99. Whether the market will embrace a higher-priced successor remains to be seen, but strong demand and Nintendo’s strategic manufacturing shifts may help the company navigate the evolving trade landscape.
