By Sam Nussey
TOKYO (Reuters) – Nintendo is set to reveal details of its Switch 2 on Wednesday with investors looking for the pricing and launch date of the successor to the home-portable Switch gaming device.
Analysts expect a smooth transition to the new device with the Kyoto-based company offering upgraded hardware while hewing closely to the form and function of its hit predecessor.
The Switch has sold more than 150 million units, with hardware refreshes and hit games from franchises such as “Super Mario” and “The Legend of Zelda” extending its lifecycle.
Jefferies analyst Atul Goyal expects the Switch 2 to retail between $399 and $499 and be launched in May to June.
“Once the Switch 2 goes on sale, we believe the strength of demand will become evident,” Goyal wrote in a client note.
The Switch, which transformed Nintendo’s fortunes after the Wii U sold poorly, launched in March 2017 priced at $299.99.
The company will provide details of the Switch 2 at a Nintendo Direct event.
Investors are looking to the games lineup, which will be key to push consumers to purchase a new device, and the strength of hardware supply after the Switch was affected by disruption.
“Judging from the level of work-in-progress on the company’s balance sheet, Nintendo is likely aiming for shipments of over 10 (million) units in the first year,” Goldman Sachs analyst Minami Munakata wrote in a note.
The Switch 2’s launch comes at a time of elevated trade tensions as U.S. President Donald Trump rolls out tariffs.
PlayStation maker Sony said in February it has been stockpiling inventory in the U.S.
Analysts point to changes in the industry including the rise of subscriptions and the backwards compatibility of consoles as helping to smooth the upgrade cycle.
“The situation appears similar to the transition from Sony’s PS4 to PS5, where earnings continued to expand largely without any downcycle,” Goldman’s Munakata wrote.
Nintendo’s shares hit a high in February and are up more than 10% year-to-date.
“We think it is unlikely that the new hardware will be big enough to justify its current share price,” Amir Anvarzadeh, a market strategist at Asymmetric Advisors, wrote in a note.
(Reporting by Sam Nussey; Editing by Aidan Lewis)
