Nintendo's upcoming next-generation console, the Switch 2, picked one of the worst times to release, particularly as it went along the start of Donald Trump's tariffs for all imported goods, and speculations claim that it may soon sell at a loss.
However, it is known that Nintendo is already asking for more than the original Switch's retail price when it first released.
At present, there is good news for tech companies who are bringing in their products to the United States because of the 90-day pause on tariffs, but if this ends, companies are set to face the harsh tariffs of Trump.
Nintendo May be Selling at a Loss With the Switch 2
The United States market is still missing out on the preorders for the Nintendo Switch 2 as the Japanese gaming company opted to delay the start date as President Trump's tariffs are set to affect its sales. That being said, the analysis of Nintendo's current plans for the Switch 2's sales would have the company selling at a loss in the United States.
According to Toyo Securities' Hideki Yasuda (via Bloomberg), this is what Nintendo will face in the US once it starts selling the Switch 2, especially with its pending preorders in the country. Yasuda said that from their estimates, Nintendo's bill of materials for the next-generation console is at $400, with the company set to sell at a loss because of the current tariff situation.
While there is currently a 90-day pause on Trump's tariffs that only left China to face the 125% rate, there is still a base 10% tariff on products coming from different regions. In Nintendo's case, the company is producing its Switch 2 consoles in Vietnam, which is also affected by the tariffs but is included in the pause.
This means that Nintendo would have to sell the Switch 2 with a $400 bill of materials and a 10% base tariff on top of it, with the company losing money on selling their console. Yasuda said that, despite this, it is something that Nintendo is prepared to "absorb."
Switch 2 $449 Price Tag Not Enough for Trump Tariffs?
With this analysis, Nintendo's sale of the Switch 2 starting now would already have them losing revenue as the cost of its manufacturing and the base tariffs are already more than what it may ask from customers to pay for.
This can worsen when the 90-day period elapses and Trump's tariffs take effect against the countries part of the exemption, with Vietnam facing a 46% rate.
Despite this, Nintendo would still be prepared to sell the Switch 2 consoles at $449 in the US and deal with their losses along the way, but the analysts pointed out that they expected the company to raise its prices by $50 to $100 when the tariffs take effect.
However, there are no official announcements yet from Nintendo regarding a price hike for the Switch 2.
That being said, the analyst said that Sony faces a harsher effect of the tariffs as most of the PS5's components and manufacturing are done over at China.
Originally published on Player One
