Key Takeaways
– Nintendo revealed the Switch 2 will cost $450, significantly higher than the original Switch’s $300 price.
– The company anticipates selling 15 million units in FY25, but higher prices may hinder early sales.
– Bundling software and hardware is a strategy to encourage early sales as the Switch 2 is compatible with original Switch games.
– Pre-orders for the Switch 2 have been overwhelmingly positive, with millions of requests in Japan and quick sales in the US.
– Nintendo is addressing pricing concerns and consumer demand while preparing for the console’s release on June 5.
Nintendo revealed the cost of the Switch 2 on April 2, surprising both fans and the gaming industry. The new console will be priced at $450, which is a big jump from the original Switch’s launch price of $300. This increase in price has left some fans feeling let down, and Nintendo itself acknowledges that the higher cost could hinder early adoption. Despite this concern, the company aims to make the new system a global hit as soon as possible.
Earnings Call Insights
During a recent earnings call for FY25, president Shuntaro Furukawa addressed queries about forecasts, tariffs, and other important details. The company anticipates selling 15 million units of the Switch 2 within the fiscal year, but Furukawa noted that the higher price might complicate early sales. Hence, they’ve taken a cautious approach in their forecasts. He pointed out that while there is strong excitement surrounding the launch, sustaining that excitement may prove to be difficult.
Strategies for Success
However, Furukawa believes that bundling software and hardware will encourage early sales, especially since the Switch 2 is compatible with original Switch games.
In the US and Canada, Nintendo briefly halted pre-orders to review the tariff situation. Initially, it was thought that the console prices would increase, but they returned with the same pricing for both the console and bundle. On the other hand, the prices for accessories have increased.
The Switch 2 is set to hit the shelves on June 5, and the response to pre-orders has been overwhelming. In Japan, the pre-order lottery attracted 2.2 million requests, while in the US, pre-orders were snatched up almost instantly.
Conclusion
Overall, Nintendo is navigating a challenging landscape with the Switch 2, balancing pricing concerns with consumer demand.