Nintendo, the renowned Japanese gaming company, recently announced its sales expectations for the upcoming Switch 2 console, projecting to sell 15 million units in the fiscal year ending March 2026. This marks the first sales forecast for the new console since its announcement, with an official launch date set for June. The Switch 2 is expected to follow in the footsteps of its predecessor, the original Switch, which has been one of Nintendo’s most successful consoles to date. In its fiscal fourth-quarter results ending March 31, Nintendo reported a significant decline in revenue and profit, with revenue falling by 24.7% compared to the previous year and profit nearly halving. This downturn was largely anticipated, as many consumers are holding off on purchasing the current console in anticipation of the new Switch 2. Earlier this year, Nintendo adjusted its sales forecast for the Switch, predicting sales of 11 million units for the year ending March 31. The company ultimately sold 10.8 million units, slightly missing its target and representing a 31% year-on-year decrease. Market research firm Omdia anticipates that Nintendo will sell approximately 14.7 million Switch 2 units in 2025 alone, surpassing the original Switch’s debut year by about 10%. George Jijiashvili, Omdia's senior principal analyst, highlighted the strong foundation for the Switch 2’s adoption, given the existing base of over 100 million active Switch users. Investors are keenly focused on Nintendo's forecasts for the fiscal year, with the company expecting net sales to rise by 63% year-on-year to 1.9 trillion yen. However, this figure falls slightly short of LSEG's estimates of 2 trillion yen. Net profit is expected to increase by 7.6% to 300 billion yen, also below LSEG's projections of 388.8 billion yen. These forecasts are based on U.S. tariff rates effective as of April 10, following a pause in tariffs previously imposed by former U.S. President Donald Trump. The tariff situation poses a potential challenge for Nintendo, as the company delayed pre-orders for the Switch 2 in the U.S. due to Trump's comprehensive tariffs on various countries. Nintendo’s consoles are manufactured in Vietnam, where tariffs could reach up to 46% once the current pause is lifted. Nintendo President Shuntaro Furukawa expressed concerns that additional tariffs could necessitate price adjustments, potentially dampening demand in the U.S. market. The impact on profit could be substantial, potentially amounting to tens of billions of yen. Serkan Toto, CEO of Tokyo-based games consultancy Kantan Games, noted that Nintendo often takes a conservative approach to its forecasts. The current tariff climate provides further justification for caution. Toto emphasized the uncertainty tariffs introduce, making accurate sales predictions challenging for any hardware manufacturer. If tariffs on imports from China remain high or increase for Vietnam, Nintendo might have to raise prices significantly, which could put pressure on the crucial U.S. market. As the launch of the Switch 2 approaches, investors are eager to see how the new console will perform. Priced at $449.99 in the U.S., the Switch 2 boasts enhanced features compared to its predecessor. Nintendo is also aiming to sell 45 million units of software within the same fiscal period. The success of any console heavily depends on its games, and Nintendo plans to launch the Switch 2 with two titles: "Mario Kart World" and "Nintendo Switch 2 Welcome Tour." Additionally, there will be Switch 2 versions of popular existing games like "Zelda: Breath of the Wild," leveraging beloved characters such as Mario and Zelda to enhance the console's appeal. Since its initial release in 2017, the original Switch has sold over 150 million units, becoming Nintendo’s second-best-selling console ever. The company has successfully prolonged the hardware’s lifecycle with hit games featuring iconic characters like Super Mario and Pokemon, as well as by expanding its intellectual property into films. Investors remain optimistic about Nintendo’s continued success, with the company's shares up approximately 30% this year and 64% over the past 12 months.