Nintendo to unveil next-generation Switch 2 in April

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Nintendo Co. said it will reveal the next-generation Switch 2 on April 2, setting in motion the retirement of the nearly eight-year-old flagship model.

The company’s new model is similar in concept and design to the current Switch, one of the most popular gaming consoles, according to a two-minute teaser video posted to its website on Thursday. The video didn’t reveal many specifics about the device, but gave a glimpse of a new version of Mario Kart and confirmed it would be backwards compatible with games for the original Switch. More details will be disclosed in April, the company said.

Game developers are counting on the new Nintendo platform to jump-start lackluster momentum in an industry competing with an ever-expanding range of entertainment for users’ time. Consoles in particular are fighting increasingly popular PC games, resulting in a project cuts and staff layoffs throughout the ecosystem. Already, many game publishers are lining up some of their best franchises for the new Switch in hopes of winning back players.

The new console will also support the company’s online gaming services, Nintendo said in November.

The Switch has sold more than 146 million units so far. But flagging momentum for the console, launched in 2017, forced Nintendo to cut its full-year profit and sales forecasts and log its fifth straight quarter of profit declines.

Consumers have eagerly awaited an announcement on a successor to the Switch, which faces more powerful and modern updates from rivals Sony Group Corp. and Microsoft Corp. Beside the features of the new hardware, focus is on Nintendo’s ability to meet demand at the console’s launch.

Initial sales momentum is a big indicator of how popular a game console will be for its whole life cycle. Chip shortages hurt the 2020 launches of Sony’s PlayStation 5 and Microsoft’s Xbox Series X and S models, sapping demand and hurting software sales.

Robin Zhu, an analyst at Sanford C. Bernstein, said ahead of the announcement that Nintendo has prepared a supply chain network that will allow the company to sell more than 20 million units in its first year. That compares with the current Switch’s sale of around 15 million units in its first four quarters.

What Bloomberg Intelligence Says:

Given the hardware segment drove 40% of fiscal 2024 top line, a successor to the 2017 Switch could go hand-in-hand with its stronger game pipeline in fiscal 2026, reversing what is expected to be the fourth consecutive year of lackluster sales growth in fiscal 2024.

-Nathan Naidu, analyst