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Highlights

  • June 5 Release: Nintendo's Switch 2 to launch at $450 in the U.S., a 50% price increase from the original Switch.

  • High Demand Expected: The original Switch sold nearly 151 million units, making it Nintendo’s best-selling home console ever.

  • New Features: Includes in-game chat and a new "Mario Kart" title, following the previous game’s 67 million unit sales.

  • Trade War Risks: Potential 20% U.S. tariff on Chinese-made products could impact costs.

  • Stock Surge: Nintendo shares up 12% YTD, driven by expected 62% revenue growth this fiscal year.

Nintendo (NTDOY) is set to launch the highly anticipated Switch 2 on June 5, with a starting price of $450—a significant increase from the original Switch’s $300 launch price in 2017. Despite the price hike, analysts expect to see significant demand, as Nintendo hasn’t released a new console in eight years, the longest gap in its history.

High Expectations, High Stakes

Nintendo is banking on the Switch 2 to extend its dominance in the gaming market, leveraging exclusive franchises like Mario, Donkey Kong, and Zelda. The console will debut alongside a new "Mario Kart" installment, a franchise whose last title sold 67 million copies—one of the best-selling games on the original Switch.

Nintendo has a history of following up hit consoles with underperformers, as seen with the Wii U after the Wii.

Trade War Threats Loom

The U.S.-China trade war poses a major risk to Nintendo’s bottom line. Many of its devices are manufactured in China, making them potentially subject to a 20% tariff. If imposed, this could either increase costs for consumers or cut into Nintendo’s profit margins.

Wall Street Remains Bullish

Despite geopolitical risks, analysts remain optimistic. Nintendo’s revenue is projected to grow 62% in the current fiscal year, with double-digit growth expected through 2027. The company’s stock is up 12% this year, outperforming most gaming stocks.

“Nintendo’s strong intellectual property and cost advantages make it well-positioned to capture more platform economics than ever before,” wrote MoffettNathanson analyst Clay Griffin.