Nintendo is set to reveal details of its Switch 2 soon, with investors eager to learn about the pricing and launch date for the successor to the home-portable Switch gaming device.
Analysts anticipate a smooth transition to the new device, with the Kyoto-based company providing upgraded hardware while maintaining the form and function of its successful predecessor. The Switch has sold over 150 million units, buoyed by hardware refreshes and popular titles from franchises like Super Mario and The Legend of Zelda.
Jefferies analyst Atul Goyal predicts the Switch 2 will retail between $399 and $499, with a launch window from May to June. He believes that once the Switch 2 becomes available, the strength of demand will be clear.
The original Switch, which revitalized Nintendo's fortunes after the poorly received Wii U, launched in March 2017 at a price of $299.99. Details about the Switch 2 will be shared during a Nintendo Direct event.
Investors are particularly interested in the game's lineup, which will be crucial in attracting consumers to the new device, as well as the reliability of hardware supply following previous disruptions. Goldman Sachs analyst Minami Munakata noted that, based on Nintendo's current financial position, the company likely aims for over 10 million unit shipments in the first year.
The Switch 2's launch coincides with heightened trade tensions, as tariffs introduced by the U.S. President may impact market dynamics. PlayStation maker Sony has indicated that it has been stockpiling inventory in the U.S. in light of these challenges.
Analysts are highlighting industry shifts, such as the growing prevalence of subscriptions and the backward compatibility of consoles, as factors that could facilitate a smoother upgrade cycle. Munakata remarked that the situation resembles the transition from Sony's PS4 to PS5, during which earnings continued to grow without a significant downturn.
Nintendo's shares reached a high in February and have risen by more than 10% year-to-date. However, Amir Anvarzadeh, a market strategist at Asymmetric Advisors, expressed skepticism, suggesting that the new hardware may not be substantial enough to justify its current share price.