Photo/Illutration After winning a sales lottery for the Nintendo Switch 2, a customer picks up the new gaming console at the counter of an electronics store in Osaka's Naniwa Ward on June 5. (Takayo Oyama)

On launch day, about 20 individuals who won a sales lottery for the Switch 2 lined up in front of a Joshin Denki Co. electronics store in the Nipponbashi district of Osaka's Naniwa Ward before it opened at 10 a.m.

"I know only one or two people in my close circle who won the lottery," said a 27-year-old who had taken time off from his job. "I want to go home and play it as soon as possible."

Nintendo Co. released its new home video game console Switch 2 at home and abroad with much fanfare on June 5.

The company announced it sold a record 3.5 million-plus units globally in the first four days of the Switch 2’s release.

Following the success of the original model, the video game giant's eventual goal is to have a Switch for every person.

While pricing is the key to achieving that goal, looming U.S. tariffs and other factors cast a shadow on the prospect, leaving Nintendo stranded at the crossroads in continuing the independent path it has forged with its popular titles.

The original Switch came out in 2017, drawing attention as a hybrid console that was both portable and could be plugged into a TV at home.

It has since sold a total of 152.12 million worldwide as of the end of March and holds the title as the company’s best-selling console ever in Japan.

The Switch 2’s improvements include a faster processing speed, improved graphics and a slightly larger 7.9-inch (20-centimeter) screen.

But its appearance and operability largely remain unchanged from the previous model, though Nintendo said it is a legitimate evolution.

GAMERS WILL PAY MORE

Upping the retail cost of each new generation of gaming consoles or their refined versions has become an industry trend. Sony Group Corp.'s PlayStation 5 Pro is notably priced above 100,000 yen ($690).

In this, the Switch 2 was not an outlier. Its multilanguage version intended for global consumers is 69,980 yen, including tax.

The Japanese-only version is cheaper at 49,980 yen, but is still 17,000 yen more expensive than its predecessor.

Though it has historically shown less interest in pursuing heavy-duty graphics, Nintendo’s focus on boosting the processing power of its new console was part of its aim to expand its lineup of playable titles the Switch could not handle.

Whether this will work in Nintendo’s favor depends on if its prices can entice a wider customer base beyond the company’s hardcore fans.

“Because it is being sold at a higher price (than the previous model), we are aware it is reasonably difficult (for the Switch 2) to be widely owned at an early stage,” said Nintendo President Shuntaro Furukawa.

Further adding insult to injury are U.S. President Donald Trump’s swathe of tariffs.

While the United States is a cash cow for Nintendo, Switch 2 consoles intended for North America are largely manufactured in Vietnam.

The company already faces a profit loss of several tens of billions of yen, according to Furukawa.

As the gross margin per console is less than the Switch, it is also possible that Nintendo will be pressed to raise the retail price in the United States depending on what policies the government may adopt.

IMMOVABLY EXCLUSIVE

Part of Nintendo’s draw comes from its tight control over its franchises.

Video game publishers choosing to simultaneously release or later port a title across multiple platforms has become common practice over the years. This strategy is geared toward maximizing profits due to increased labor costs and prolonged development periods.

Meanwhile, Nintendo has stuck to its own way of doing business.

The company has yet to make any of its properties, "Super Mario Bros." and "The Legend of Zelda" among them, available on non-Nintendo consoles.

Nintendo has established a business model that licenses its video game characters and their worlds for theme parks and film adaptations.

"Those popular characters are what make Nintendo's strategy what it is," said Hiroko Saga, editor-in-chief of the Weekly Famitsu video game magazine. "Rising prices of video game consoles was an inevitable trend. Future sales depend on how many of the new game titles released will be attractive enough to convince gamers to pay for the Switch 2."

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