“Nintendo Switch 2 is priced relatively high compared to Nintendo Switch, so we recognize that there are corresponding challenges to early adoption,” Furukawa said. “We are taking steps like bundling software with the hardware to accelerate adoption in the first fiscal year, aiming to get off to the same start we did with Nintendo Switch.”
Furukawa cautioned that investors shouldn’t get carried away over the extreme demand for Switch 2 pre-orders. Due to the system’s high price, he said that “even if there is momentum around the launch, we know it will not be easy to keep that momentum going over the long term through the holiday season and beyond.”
Furukawa said that its production capacity for Switch 2 was “not a factor” in settings its forecast, and neither was the unstable economic situation. “The tariff situation in the U.S. or a possibility of a recession did not affect
our sales volume forecast either,” he said.
He went on to give Nintendo’s fullest statement yet in response to U.S. tariffs, saying that it was working on the assumption that the current tariff rates would persist for the rest of the financial year, which would result in “a negative impact of several tens of billions of yen at the profit level.”
“Our basic policy is that for any country or region, if tariffs are imposed, we recognize them as a part of the cost and incorporate them into the price,” he said. “However, this year marks our first new dedicated video game system launch in eight years, so given our unique situation, our priority is to maintain the momentum of our platforms, which is extremely important for our dedicated video game platform business, and to rapidly expand the install base of our new hardware. Consequently, if the assumptions on tariffs change, we will consider what kind of price adjustments would be appropriate, taking into account various factors such as the market conditions.”
To translate this from CEO-speak: Nintendo would usually slap the cost of tariffs onto the price of its hardware, but didn’t do so in this case because it wants to sell as many Switch 2s as possible. It’s not ruling out making pricing changes as the situation evolves (but it probably won’t).
The whole Q&A is worth a read, just for the bizarre spectacle of a business leader patiently explaining and re-explaining to his insatiable investors why he thinks his new product is only going to be one of the fastest-selling consoles of all time, which is apparently a terrible disappointment to them. Capitalism!
