Nintendo president says tariffs will drop profits by tens of billions of yen

Nintendo expects a huge +60% increase in net sales revenue from the Switch 2, but only a +7.6% profit increase--tariffs are to blame for reducing margins.

Nintendo president says tariffs will drop profits by tens of billions of yen
Comment IconFacebook IconX IconReddit Icon
Senior Gaming Editor
Published
2 minutes & 15 seconds read time

As an Amazon Associate, we earn from qualifying purchases. TweakTown may also earn commissions from other affiliate partners at no extra cost to you.

TL;DR: Nintendo's global tariff challenges will reduce its FY26 net profit despite a projected 63% sales increase driven by the Switch 2 launch. Higher component costs and tariffs lower hardware margins, prompting Nintendo to maintain prices now but consider future hikes if tariffs rise, impacting overall profitability.

The current global tariff war will eat into Nintendo's bottom line and shave off hundreds of millions of dollars in net profit, company president Shuntaro Furukawa tells investors and media.

Nintendo president says tariffs will drop profits by tens of billions of yen 77
3

Tariffs have impacted Nintendo's Fiscal Year 2026 outlook. The Japanese games-maker expects its new Switch 2 platform to be a hit, with forecasts at 15 million systems shipped and 45 million games sold. Nintendo forecasts net sales to spike by +63% year-over-year to 1.9 trillion yen (about $13 billion in today's forex rates), and if achieved, this would be a new all-time earnings record.

Unfortunately, Nintendo's FY26 profit forecast isn't as optimistic, with a small +7.6% increase from FY25's results to deliver 300 billion yen (about $2 billion). This is on the lower end of Nintendo's annual profits made during the Switch 1's lifecycle.

Nintendo president says tariffs will drop profits by tens of billions of yen 26
3

Typically, this dramatic surge in net sales should also drive up profits, but Nintendo is taking a hit due to a combination of tariffs and lower hardware profit margins--Nintendo president Shuntaro Furukawa has confirmed that the Switch 2 has a lower profit margin than the original Switch (this is likely due to the more expensive components). Nintendo chose to maintain the Switch 2's $450 price in the United States despite the effects of tariffs.

The company's prognostications only take the current tariff rates into account, and if tariffs get raised, Furukawa says Nintendo is prepared to explore price hikes.

"The tariffs have been factored in as a negative impact of tens of billions of yen on profits," reads a report from Reuters Japan.

Niko Partners analyst Daniel Ahmad weighed in on the topic, saying:

"Furukawa also told Japanese media that the current tariff rates (As of April 10) would lower profit by tens of billions of yen for the company. Could also have a knock on effect for overall video game spending if spending priority shifts to essential goods.

"This is in addition to the comments saying that prices would change (go up) if the tariff situation changes. Nintendo is extremely margin conscious and would not be willing to eat any more costs itself."