Nintendo to Cut Switch 2 Production by One-Third Due to Low US Demand

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According to a Bloomberg report, Nintendo plans to reduce Switch 2 production by one-third this quarter, manufacturing four million units instead of the initially projected six million, due to weaker-than-anticipated U.S. sales. While the Switch 2 experienced a strong launch on June 5, selling 17.37 million units and marking Nintendo’s best console release to date, particularly in the U.S., it has struggled to maintain sales momentum outside Japan. Nintendo President Shuntaro Furukawa acknowledged in an early February investor call that international sales were slightly below expectations. In Japan, the Switch 2 benefited from a domestic version priced at approximately ¥49,980 (300 USD), which Nintendo sells at a loss, anticipating long-term success. A more concrete sign of potentially softening demand was the performance of Metroid Prime 4: Beyond. Despite being announced in 2017 and undergoing a mid-development restart, the game only sold one million copies in its first month after its December release. This was a weak start for a major Nintendo launch, especially considering the Metroid franchise’s popularity in the U.S., where the Switch 2 has performed the poorest.

Asymmetric Advisors analyst Amir Anvarzadeh told Bloomberg, “This hardware deficit during its first year, amidst peak holiday season, is bad news. Nintendo’s game catalog was clearly weak until recently, with Pokémon showing some hope.” Pokémon Pokopia, launched recently, has already surpassed two million sales; however, this success has not yet prompted Nintendo to increase production, preferring to assess the long-term viability of this and other upcoming titles before raising production rates. Bloomberg reported on March 24, 2026, that Nintendo is reducing Switch 2 production by over 30% for this quarter due to lower-than-anticipated sales during the 2025 holiday season. The reduced production is expected to extend into April 2026 and affect the fiscal year ending in March 2026. While 17.37 million units were sold by the end of 2025, no specific sales figures have been released for the initial four days after launch.

Nintendo Faces Challenges in Switch 2 Sales Amidst GTA VI Release and Inflationary Pressure

According to Bloomberg, Nintendo will face a “tsunami of GTA VI” when Grand Theft Auto VI is released in November for PS5 and Xbox Series X/S, potentially posing a significant challenge to Switch 2 sales by the end of 2026. The ongoing conflict in the Middle East further complicates logistics for exporters like Nintendo, intensifying inflationary pressure on hardware components such as RAM. In addition, increased memory prices due to demand for AI infrastructure are impacting the console’s production costs, leading Nintendo to consider a price increase. While this pricing pressure is not currently the reason for the production cuts, which are attributed to lower consumer demand, the two issues could eventually converge. Historically, the second year is crucial for a console, as the installed base typically becomes large enough to attract significant third-party developers, creating a positive cycle that transforms a good launch into a sustainable platform, as seen with the original Switch. Nintendo has until the end of the year to demonstrate the Switch 2 can overcome this challenge, hoping this production drop isn’t indicative of a broader trend.

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