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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Despite repeated predictions that the rise of mobile platforms, cloud gaming and high-performance PCs would make consoles obsolete, Nintendo has proved that hardware still matters. The record-breaking debut of the Switch 2 has reset the narrative.
Nintendo had a target of selling 15mn units of its new console by March next year. Yet in just four days, the Japanese gaming company sold more than 3.5mn units of the $450 Switch 2, its strongest launch on record. The momentum is notable for a hybrid console that doubles as a handheld and home device, especially at a time when the industry is shifting towards digital distribution and subscription services.
Early sales figures are reshaping the outlook for Nintendo’s fiscal year. Gaming hardware and software titles account for the vast majority of group revenue. While the Switch 2 costs more to make than its predecessor, analysts expect revenue of ¥2.1tn ($14.5bn) in the current fiscal year, according to LSEG, higher than the ¥1.9tn Nintendo forecast back in March.
Supply, however, presents an immediate constraint. Strong early demand has already led to shortages, with some markets experiencing limited availability at launch. In response, Nintendo has asked manufacturing partners to accelerate production in the coming months. Among the suppliers for the Switch 2 is artificial intelligence chipmaker Nvidia.
The runaway success of the original Switch has also intensified competition, sparking a new wave of handheld challengers. Devices such as Steam Deck, Rog Ally and Legion Go are now competing for the same users. Sony, Nintendo’s most direct rival, is also reportedly preparing a new portable PlayStation device.
Adding to these pressures are geopolitical risks, particularly surrounding international trade policy. Nintendo delayed taking US pre-orders for the Switch 2 from April to June to assess President Donald Trump’s tariffs. The wider threat remains unresolved. Given the product is already priced at a premium compared with its predecessor, any extra cost shifted on to consumers could slow momentum.
Yet Nintendo’s strength does not lie in cost competitiveness. Even as rival devices offer compelling hardware alternatives, they lack Nintendo’s exclusive franchises such as Mario, Zelda, and Pokémon. Backward compatibility with earlier Switch titles will allow users to access an instant game library from day one, which reduces the burden on gamers that can arise when a new piece of hardware launches.
Most importantly, Nintendo’s greatest edge lies in generational familiarity. For many, its products serve as the first introduction to gaming. That connection has allowed Nintendo to stay relevant even as the industry shifts around it. In a market once defined by short product cycles and shifting consumer tastes, Nintendo is redefining what a successful gaming strategy looks like in a fragmented, cross-platform landscape.
