Bloomberg: Nintendo Gains Time to Prep Switch 2 Debut With Tariff Pause

Ritsumei2020

Ritsumei2020

Who did they think I was shilling for?
A pause on the most punishing US tariffs in a century hands Nintendo Co. valuable time to prepare the momentous June launch of its new console and lifts pricing pressure. For now.

The 90-day reprieve on heightened tariffs for most US trading partners gives the Japanese company a chance to ramp up shipments of the Switch 2 to a market that accounts for more than a third of its sales.

Roughly a third of Switch 2 units are assembled in Vietnam — which would've been subject to a 46% levy, but now only faces the 10% universal tariff imposed by Donald Trump's administration. Nintendo can focus all that production on the US and stock up as many units as possible over the next three months.
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The company is preparing for what the industry expects to be the largest gaming console launch in industry. Hosiden Corp., one of three main Switch 2 assemblers, shipped more devices in February to the US from Vietnam than in the previous six months combined, according to customs data provided by NBD. That suggests Nintendo can build a stockpile of millions of consoles from the Southeast Asian country in time for the June launch.

Notably, almost all of Hosiden's production went to the US starting January, from about 11% to two-thirds over the previous 12 months, the data showed. Shares in Kyoto-based Nintendo jumped 12% on Thursday.
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Nintendo's Vietnam Production Going Almost Entirely to the US

It's the only console maker in the country and is ramping up output

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There's no plan B for the company beyond the $450 Switch 2, which will soon be the key platform for its popular game franchises. Nintendo is diversifying its business to better tap a rich library of intellectual property and beloved characters — via film, merchandise and theme parks — but to do that, it must have a thriving platform and expanding user base.

"If the tariffs stay at 10%, Nintendo probably keeps pricing at $450 and just takes the hit on margin," said Bernstein analyst Robin Zhu. "At 46% Vietnam tariffs, I expected them to raise by $50 to $100."

Nintendo delayed pre-orders in the US to fully assess the impact of the new tariffs — which were announced mere hours after Nintendo's online event unveiling the Switch 2's price and launch game lineup. The company has spent months strategizing for the global release of the console and ensuring the first units land with gamers and not scalpers. In the UK, for example, it's prioritizing customers with a Switch Online membership and ample playing time on the Switch.
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The initial launch window is a pivotal time for game consoles, much as with movie premieres. It sparks interest beyond loyal users and sets up marquee titles for a fast start. Sony Group Corp.'s PlayStation 5, released in late 2020, took years to gain momentum because of the pandemic's impact on logistics and availability.

Nintendo may face similar challenges now with shipping its device out of Vietnam, which is also home to other major exporters to the US, such as Nike Inc. and Adidas AG. While Vietnam and the US have started negotiations to forestall elevated tariffs, most companies are likely to hasten deliveries to the US to maximize what they can ship in the 90 days.
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US levies on imports from China were hiked to 125% as part of Trump's Wednesday reversal of country-specific tariffs for most other nations. That makes it prohibitive for Nintendo to ship its made-in-China production to the US and also poses a challenge for its competitors.

"We believe the Switch 2's bill of materials is around $400, meaning Nintendo would still be selling consoles at a loss in the US with the 10% tariff — but the loss would be something Nintendo would be able to absorb," said Hideki Yasuda of Toyo Securities. "Sony is in a tougher situation as most of its PlayStation production is in China, and it may be forced to hike PS5 prices in the US in the near future."
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PC makers showed one path to navigating the tariff uncertainty over the first quarter by stockpiling inventory in the US and doing away with discounts. Nintendo, which plans to sell a Japan-only version of the Switch 2 that costs less than $350, will likely do everything it can to avoid further price increases.

The Switch 2 already marks a climb up in price from the original Switch, plus Nintendo also announced the first $80 console game with its Mario Kart World. The company faces the burden of convincing players to spend more just for the device and software, whose prices have been pushed up by escalating costs of production.

The US tariff threat still looms, but now at least the picture is clearer around the launch window of the Switch 2. That's brought Nintendo's Tokyo-traded shares back to within 1% of where they were before Trump's Liberation Day speech that's reverberated across global markets.
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Mod Edit: Replaced the link to the kotaku article with an actual business reporting from Bloomberg.
 
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There's still a 10% tariff that wasn't there before, and 60% of US hardware shipments for Nintendo come from Vietnam. 40% come from other countries so they were probably still using China to some extent. https://www.niftytrader.in/content/...ing-to-vietnam-amid-u-s-china-trade-tensions/

The tariffs are still going to be having an effect on everybody even if excluding China they're much reduced.

Whether Nintendo eats those costs or raises the price we will have to see.
 
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I'm not buying one at launch, but Nintendo has a small window of time to get as many Switch 2 into America as possible.

I'm actually becoming more curious to see if Nintendo can pull this business situation off then I am about the games.

Kudos to Nintendo if they can make this happen in mass before The White House changes its mind again or July arrives.
 
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I'd say things are looking much better now. Send Taiwan and Vietnam made consoles to the US and China made elsewhere and they should be good for the rest opf the calendar year. But we'll see what happens when they need to restock and the US administration is still clowning around.
 
GigaBowser said:
Screenshot-2025-04-10-035320.png
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In your original comment you mentioned chips and not the assembly of the console itself which is indeed done in Vietnam, Cambodia and China.

If I recall correctly the Switch 2 is on a Samsung 8nm process so the fab should be located in South Korea or in the U.S.

semiconductor.samsung.com

Manufacturing sites | Manufacturing | Samsung Semiconductor Global

Samsung Foundry has world-class facilities and is expanding worldwide to provide better service. Discover their manufacturing sites in Korea and the United States.
semiconductor.samsung.com semiconductor.samsung.com
 
The problem is that Nintendo daren't announce preorders again, because things may change next week! Probably easiest for them just to sell on release or just before.

Life in a dictatorship I suppose!
 
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Trump only lowered tariffs to 10% for the the next 90 days. That means the price of the Switch in the US could very well go from $450 to $500 US.

And who knows if Trump changes his mind in the upcoming days/weeks/months and the whole circus will begin again.
 
kruis said:
Trump only lowered tariffs to 10% for the the next 90 days. That means the price of the Switch in the US could very well go from $450 to $500 US.

And who knows if Trump changes his mind in the upcoming days/weeks/months and the whole circus will begin again.
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It is likely that Nintendo priced that in already. I mean why wouldn't they assume some tariff since the clown keeps touting these taxes and price that risk in from the get go? They only stopped when the moron brought out that 3rd grade idiot calculation nonsense.
 
Trump will be looking for ways to climb down from the tariffs without losing face. He's found out that the world will not bow down to him, and it's been a bit of a surprise, as has finding out that he might destroy his own economy.
 
Mr Reasonable said:
Trump will be looking for ways to climb down from the tariffs without losing face. He's found out that the world will not bow down to him, and it's been a bit of a surprise, as has finding out that he might destroy his own economy.
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lol what? The tariffs have been a success with most countries renegotiating their own deals.

The only hold out is the worst. China.
 
The only way i see this peacefully ending is either
1.) the rest of the world starts building supply chains away from US and Chinese control, to level the playing field and bring everyone to the table.
2.) Another pandemic that is more deadly and costly, thus having to rebuild supply chains globally
3.) China and US coming to an understanding of mutually assured destruction.

What i find interesting though, (surprising no one)…if we are talking about less goods and services, why are we not talking about 1.) Higher product quality and 2.) right to repair?

Thes things would both help he consumers globally. No one seems to mention that.
 
RoboFu said:
lol what? The tariffs have been a success with most countries renegotiating their own deals.
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The success: singlehandedly sinking the US market and the confidence of all historic allies of the US
The renegotiation: all other affected coutries imposing increased tariffs over US goods.

welp
 
Nintendo has 90 days to scale up inventory ahead of potentially resumed tariffs.

Should at least allow them to keep the price of the Switch 2 the same for the year or at least until pressure forces the removal of tariffs.
 
Sephiran said:
According to import data from Bloomberg, Nintendo had already shipped 1,1 million Switch 2 units to the US with February import data included. With March data we could see already around 2 million units shipped to the US. And with the 90 day pause on Vietnam tariffs, price should remain unchanged for all of the 2025 supply in the US.

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From that article:

Roughly a third of Switch 2 units are assembled in Vietnam — which would've been subject to a 46% levy, but now only faces the 10% universal tariff imposed by Donald Trump's administration. Nintendo can focus all that production on the US and stock up as many units as possible over the next three months.

"If the tariffs stay at 10%, Nintendo probably keeps pricing at $450 and just takes the hit on margin," said Bernstein analyst Robin Zhu. "At 46% Vietnam tariffs, I expected them to raise by $50 to $100."
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So every single Switch 2 manufactured in Vietnam and Cambodia will still be hit with a 10% tariff and we don't know how Nintendo will react to this. This particular analyst thinks Nintendo will eat the loss but that's just one guy's opinion.
 
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LordOcidax said:
I expect that by next Monday they are going to start taking preorders, not variations in the price.
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There's still a 10% tariff, I wonder if they'll eat that up. With all the drama around pricing they should totally do that but since they don't operate under normal logic I can see them going up to 480/520
 
RoboFu said:
lol what? The tariffs have been a success with most countries renegotiating their own deals.

The only hold out is the worst. China.
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The tariffs were based on balance of trade deficits in goods, so actually had nothing to do with existing trade deals. For example Switzerland was hit with a 32% tariff despite already imposing no taxes on imports.
 
Hyet said:
I'd say things are looking much better now. Send Taiwan and Vietnam made consoles to the US and China made elsewhere and they should be good for the rest opf the calendar year. But we'll see what happens when they need to restock and the US administration is still clowning around.
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Called it. This just now:
 
The good thing is that Mexico has good relations with China, Japan, Vietnam, with 98% of the countries... Except Ecuador, Perú, Argentina And we're exempt from tariffs... From what I see, it's better if I do the Nintendo Switch 2 section.
 
RoboFu said:
lol what? The tariffs have been a success with most countries renegotiating their own deals.

The only hold out is the worst. China.
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This was not the art of the deal, "winning" so much in negotiations that he raised the white flag yesterday. Because there was a massive fire sale on bonds that would result in economic meltdown.

And china remains and will never back down. There's no winning here. I want to go back to boring life with boring politicians please.
 
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Buggy Loop said:
This was not the art of the deal, "winning" so much in negotiations that he raised the white flag yesterday. Because there was a massive fire sale on bonds that would result in economic meltdown.

And china remains and will never back down. There's no winning here. I want to go back to boring life with boring politicians please.
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Beyond clueless.
 
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