Nintendo announced that domestic sales of Splatoon 3 reached a record within three days of its release. Splatoon 3 was a hit in Japan and helped keep momentum going for Nintendo’s aging Switch console.
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This approach, which combines the home aspect of console gaming with the portability of mobile gaming, has proven to be extremely popular among gamers. Nintendo has sold 132.46 units of the Switch, making it the company’s second most successful home game console after the handheld Nintendo DS.
Since the release of the Switch, Nintendo’s stock price has increased more than 200%. This console helped the company maintain its sales momentum over the years, thanks to a steady and strong flow of first-party games and popular characters.
Games involving Mario, Zelda, and Pokémon are among the Switch’s best sellers.
However, there are signs that sales are starting to slump and Nintendo needs something new. Nintendo announced in its September quarter results that sales were down 4% and profits down 19% compared to the same period last year.
“I think we’ll see new devices in 2024, probably later this year,” Serkan Toto, CEO of Tokyo-based gaming consultancy Kantan Games, told CNBC.
“The original Switch is nearly seven years old and sales are declining… so this year is definitely the time to launch a new Nintendo system.”
Piers Harding-Rolls, director of games research at Ampere Analysis, expects the new Switch to be released in the fourth quarter of this year.
Jefferies managing director Atul Goyal said the timing of the launch will depend on recent sales. Goyal said Nintendo could launch a new console this fall if the Switch maintains its popularity in the holiday quarter. He added that if Switch sales drop in the December quarter, the new device could launch as early as spring or summer.
Nintendo has not yet announced its December quarter financial results.
By launching a new console this year, Nintendo could also capitalize on the popularity of many of its main characters after the movie’s release. “Super Mario Bros. Movie” has grossed more than $1 billion at the box office since its release in April, contributing to Nintendo’s revenue increase in the June quarter of last year. Nintendo announced in November that it plans to develop a live-action film of The Legend of Zelda, one of the company’s most popular characters.
Not so much at the moment as The company has remained tight-lipped about future developments. Analysts expect what they’re calling Switch 2 to follow the hybrid approach set out by its predecessor.
“We expect Nintendo’s next console to be a successor to the Switch because the hybrid device approach has been so successful,” Harding-Rawls said, adding that the capabilities of the company’s console controllers may also be upgraded. He added that it is expensive.
Kantan Games’ Toto said he hopes the successor will be “a new device, not just an upgrade.”
“Nintendo needs a major spec upgrade for the first time in seven years, so we will definitely release a successor,” Toto said.
Building on the success of the Switch, such an approach makes sense for many.
“It’s more likely to be an evolution, not a revolution, in console strategy: the iPhone model. This gives us the opportunity to familiarize our 130+ million Switch audience with a more powerful form factor. , making the 1st (and 3rd) party games Nintendo will be able to sell compelling for a mass audience,” Moffett Nathanson analysts wrote in a December note.
Harding-Rawls said the performance of new consoles will be affected by product availability. However, he expects the product to “achieve similar levels to the original Switch during the first sales period in the fourth quarter,” which would translate into around 7 million to 8 million units sold to consumers. He said it was equivalent.
Analysts at Moffett Nathanson say the Switch 2 is unlikely to “match or exceed the Switch,” adding that the current Nintendo console has not been as easy to play while at home during the coronavirus pandemic. He claimed that he was benefiting from the people who bought it.
Still, analysts say comparisons between Nintendo’s 2021 and 2022 fiscal years, which have been inflated due to the impact of the coronavirus, are “so difficult that this upcoming console could match the Switch’s early performance.” “It’s possible that it will increase or even exceed that, but it will slow down after the fourth year.” To overcome. “