The announcement of the Switch 2 disappoints the Tokyo stock market

The Japanese video game giant Nintendo saw its stock fall by 7% on Friday on the Tokyo Stock Exchange after the succinct presentation of its new console, the Switch 2, judged without surprise or great originality by observers.

Nintendo shares fell up to 7.04% during trading on the Tokyo Stock Exchange. Around 6:00 a.m. Swiss time, it lost another 4.50% to 9,157 yen.

The fact that crucial technical specifications such as the resolution of the screen or the power of the console were not revealed undoubtedly contributed to this manifestation of bad humor. These features will be detailed on April 2 before demonstrations around the world the following days.

Previously, the prospect of the announcement of the new Switch had exacerbated expectations and caused Nintendo’s stock price to rise by 12% over the last six months according to “leaks” on the internet.

The stakes are massive for Nintendo. The new machine must take over from the Switch: released in March 2017, this hybrid console, playable both on the go and connected to a television, has become a huge success.

It had sold 146 million copies at the end of September 2024, making it the third most popular console in the history of video games behind Sony’s PlayStation 2 and the Nintendo DS. Nintendo estimates that it has sold 1.3 billion games running on the Switch.

But sales have run out of steam over the years: while waiting for a successor to its aging machine, the Japanese giant saw its net profit plummet by 60% year-on-year in the first half of its staggered financial year which began in April 2024. , and lowered its annual forecasts.

Certainly, the Kyoto-based group is working to increase its brand recognition by opening theme parks and financing films featuring its characters like “Super Mario.” “However, Nintendo still generates around 91% of its revenues from its Switch,” insists Darang Candra, analyst at Niko Partners, to AFP.

Above all, the range of games available will be decisive: the trailer seems to show a new version of the Mario Kart series on the integrated screen of the new console.

The previous installment for the Switch, “Mario Kart 8”, sold more than 64 million copies.

A new Mario Kart title is a “positive,” but due to a later release in the calendar year, “the Switch 2 may not surpass the 15 million unit sales recorded by the Switch on its first year,” commented Nathan Naidu of Baidu Intelligence.

For Serkan Toto, “players are certainly not blown away as they were by the revelation represented by the first Switch, but I think the demand will be very high, at least in the first year.”

He said making the Switch 2 “simply a bigger and better version of the original console might be all Nintendo needs: there’s no real pressure from gamers to reinvent the wheel”.