According to a Bloomberg report, Nintendo Co. is betting big on its next-generation console, directing suppliers to produce up to 25 million units of the Switch 2 by March 2026.
The move signals a strategic attempt to dominate global console sales in the post-pandemic gaming market and sustain its momentum after record-breaking hardware success.
The Japanese gaming giant began assembling the device at the end of 2024, expecting a surge in demand through the holiday season.
With manufacturing partners already increasing output, the company appears set to exceed early projections for its fiscal year ending March 2026.
Analysts had anticipated sales of around 17.6 million units, but current shipping estimates point towards roughly 20 million consoles being sold within the period.
Switch 2 sales momentum fuels investor confidence
Bloomberg reports that Nintendo’s share price, traded in Tokyo, rose as much as 2.4% on Friday following reports of the expanded production plan. The company’s stock has climbed more than 50% over the past year, supported by record early sales of the new hardware.
While investor enthusiasm has cooled after several peaks, expectations remain high ahead of Nintendo’s upcoming quarterly results, where it is projected to report a 68% year-on-year rise in revenue.
Earlier in June, the Switch 2 launch saw supply shortages in Japan, with 2.2 million people vying for units. This underscored how strained initial inventory was relative to demand.
While in the same month, Nintendo stock also reached a record high on Switch 2 momentum, showing how investor sentiment has been tied closely to the console’s performance.
The Switch 2, priced at about $450, has become a key driver of this optimism. Early sales trends show the console performing far ahead of its predecessor, particularly in the United States — Nintendo’s largest market.
Data from Circana Research indicates that Switch 2 sales are currently 77% higher than the original Switch launched in 2017.
In anticipation of holiday demand, Nintendo doubled its marketing budget during the console’s June release, aiming to secure a strong foothold before rivals introduce their own devices.
Bloomberg states that this aggressive expansion also reflects lessons learned from competitors such as Sony Group Corp. and Microsoft Corp., whose pandemic-era launches were hindered by supply chain disruptions and component shortages.
Supply chain resilience keeps Nintendo ahead of rivals
Nintendo’s current approach centres on supply resilience and consistency. The company built up a substantial inventory ahead of launch, ensuring stable availability even in the face of global logistics challenges.
By contrast, both Sony’s PlayStation 5 and Microsoft’s Xbox Series X faced months of shortages after release due to pandemic constraints.
One major advantage for Nintendo is backward compatibility. The Switch 2 supports the entire existing Switch games library, immediately offering users a large catalogue of playable titles without needing new purchases.
This compatibility has helped sustain interest while giving Nintendo’s ecosystem a strong head start in the new console cycle.
Despite its high production targets, the company remains cautious about demand volatility tied to broader economic conditions. However, signs so far suggest sustained consumer appetite, with several regions still reporting limited stock.
Retailers have cited strong pre-orders and rapid sell-through rates, highlighting persistent demand despite new tariffs in the US that could affect hardware pricing.
Game releases and ecosystem growth driving long-term demand
Bloomberg notes that Nintendo’s growth strategy extends beyond hardware sales. The company’s software ecosystem continues to strengthen, with major releases like Pokémon Legends: Z-A expected to fuel console purchases through the end of the year.
The title is set to be one of the key drivers of renewed momentum for the Switch 2 platform.
This alignment of hardware and software launches underpins Nintendo’s long-term plan to sustain engagement within its user base.
By ensuring compatibility across generations, the firm avoids fragmenting its audience — a challenge that has historically slowed competitors during transitions between console versions.
While maintaining such a high production rate carries risks if demand slows, the company’s steady performance so far suggests otherwise.
The gaming industry, now worth over $180 billion globally, continues to see strong console adoption, particularly across hybrid devices that cater to both handheld and docked gameplay — a segment Nintendo continues to dominate.
With its next earnings announcement approaching, analysts expect Nintendo to revise its annual forecast upward. If current trends continue, the company could achieve one of the highest first-year console sales figures in gaming history, solidifying its position at the top of the global entertainment market.
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