TOKYO, Japan: Nintendo reported a sharp rise in annual profit on Friday as strong demand for its Switch 2 console and popular game titles boosted sales, though the Japanese gaming giant warned profits are expected to decline in the coming year.

The company also announced price increases for its Switch 2 gaming system in Japan and the United States, citing changing market conditions and a challenging global business environment.

Nintendo posted a net profit of 424 billion yen ($2.7 billion) for the fiscal year ended March, up 52% from nearly 279 billion yen a year earlier.

Annual sales jumped 99% to 2.3 trillion yen ($15 billion), driven largely by continued demand for the Switch 2 console and related software, even as sales of the original Switch weakened.

The Kyoto-based company said the price of the Switch 2 in Japan will rise to 59,980 yen ($382) from 49,980 yen ($318) starting May 25.

In the United States, the console's price will increase to $499.99 in September from $449.99.

Nintendo did not provide detailed reasons for the increases, but Japanese exporters have been facing rising costs linked to U.S. President Donald Trump's tariffs and economic disruption tied to the Iran war.

Despite the strong results, Nintendo forecast an 11% drop in profit for the fiscal year ending March 2027, projecting earnings of 2.1 trillion yen ($13 billion). The outlook includes the expected impact of the planned price hikes.

The company said it expects to sell 16.5 million Switch 2 consoles during the current fiscal year, down nearly 17% from 19.86 million units sold in the previous year.

However, software sales are expected to keep growing. Nintendo forecast sales of 60 million Switch 2 game titles this fiscal year, up 23% from 48.7 million previously.

Among the company's recent successful titles are Mario Kart World and Donkey Kong Bananza.

Nintendo also said Tomodachi Life: Living the Dream has sold more than 3.8 million copies since its release two weeks ago.

Meanwhile, the company's film The Super Mario Galaxy Movie has generated more than $800 million globally since debuting last month.

Nintendo said more game titles are planned for release on the Switch 2 this year, including the latest installment of Final Fantasy.

Nintendo shares rose 3.6% following the earnings announcement.