Nintendo Co. saw its stock price drop 5.9% in Tokyo on Friday, marking its biggest intraday decline since September, after the company revealed a brief teaser of its next-generation Switch 2 console. The two-minute video, posted on Nintendo’s website Thursday, hinted at some of the features of the highly anticipated console but left many details sparse, with the company promising more information on April 2.
The teaser video showed a new version of Mario Kart and confirmed that the Switch 2 would be backwards compatible with games from the original Switch. It also hinted at a larger screen, new buttons, and magnetically-attached Joy-Con controllers, but did not provide specifics on pricing, release dates, or other significant upgrades.
“The stock fell because the Switch 2 announcement closely matched what had already leaked online, offering no surprises,” said Hideki Yasuda, senior analyst at Toyo Securities. He added, however, that he expects Nintendo’s stock to recover as investors shift their focus to the official launch details and pricing to be revealed in April.
Nintendo also announced that consumers will be able to try the Switch 2 at events in various locations on May 31 and June 1, which suggests the console could be officially launched in June. This aligns with expectations that the new platform will play a critical role in revitalizing the gaming industry, which is increasingly competing with other forms of entertainment, including popular PC games. Many game developers are counting on the new console to reignite interest in the hardware market, with some already preparing their top franchises for the new system.
In addition, the new console will support Nintendo’s online gaming services, although the company has cautioned that not all existing games will be playable on the Switch 2.
The Switch has been one of Nintendo’s most successful consoles, selling over 146 million units. However, its momentum has been slowing, forcing the company to lower its full-year profit and sales forecasts and report its fifth consecutive quarter of profit declines. The upcoming launch of the Switch 2 will be closely watched as it faces increasing competition from more powerful consoles like Sony’s PlayStation 5 and Microsoft’s Xbox Series X and S.
The success of the Switch 2’s initial sales will be a crucial indicator of its long-term performance, as early momentum is a strong predictor of a console’s overall lifecycle. Nintendo will also need to ensure it meets demand at launch, as global chip shortages previously hampered the launches of Sony’s and Microsoft’s consoles in 2020, reducing demand and slowing software sales.
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