(BFM Bourse) – Nintendo shares ended down 4.3% this Friday, January 17 after having formalized the day before the launch of the Switch 2, a console succeeding its flagship product introduced in 2017. But between the absence of technical details and a relatively uninnovative machine, the action found itself under pressure on the Tokyo Stock Exchange.
Both for the market and for gamers, the Switch 2 was a real Arlesienne. For many months, investors and players have been waiting for Nintendo to unveil the machine that would succeed its versatile console (it can be used as a portable or living room console, hence the name “Switch”).
Nintendo was very stingy with information, contenting itself with indicating last May that an announcement would be made by the end of its 2024-2025 fiscal year (i.e. before the end of March 2025) . At the same time, more or less serious leaks in the press have multiplied.
The Kyoto-based company finally unveiled a trailer on Thursday afternoon delivering the first images of this new console, which will be aptly named “Switch 2”.
Concretely, the machine will be larger than its illustrious predecessor, with a very similar, if not identical, design. The video also shows an entirely black console when the Switch, when it was released in 2017, offered blue and red “Joy-Con” (the side controls of the console, which clip onto the side). Some minor new features should be noted. For example, the Joy-Cons are no longer attached to the console via “rails” but using a system of magnets.
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Nintendo stock suffers
On the game side, the trailer showed very brief images of a Mario Kart game, without us being able to be sure at this stage that it is indeed a new title and not simple demonstration images .
The video explains that this console will be backward compatible, that is to say that the Switch 2 will be able to play games released on the first Switch, while specifying that “certain titles could be incompatible or not fully compatible”.
A more detailed presentation of the console is planned during the Nintendo Direct event on April 2.
Ultimately, all this information still remains very scanty for such a highly anticipated console. On the Tokyo Stock Exchange, Nintendo shares ended down 4.26%, the title's biggest drop since the end of September, while the Nikkei 225 fell only 0.3%. The stock lost around 7% during the session.
Lack of crucial details
As is often the case with this type of information, the market was able to “buy the rumor and sell the news”, especially since the concrete announcements in this case are quite poor. “The fall is because the various information that was already circulating matched Nintendo's announcements which lacked surprise,” Hideki Yasuda, senior analyst at Toyo Securities, said in a note cited by Nikkei Asia.
“The action [de Nintendo] was bought on expectations and sold on facts,” he added.
-Quoted by the Wall Street Journal, Tomoichiro Kubota, senior market analyst at Matsui Securities, believes that investors have so far taken profits on Nintendo stock because the company has not announced key details such as launch date, price and gaming plans. “Without these details, it is not possible to make profit forecasts,” he explained.
“Crucial technical specifications such as the screen resolution or the power of the console have not been revealed,” notes John Plassard of Mirabaud, in his morning note.
The absence of major novelty in terms of the concept itself can also weigh. “The reveal of the console didn't have the same 'oomph' as that of the original Switch console,” Serkan Toto of Kantan Consultancy told Reuters. “What we saw looked more like a 'Switch Pro ' (a larger version of the Switch) than a Switch 2”, he specifies.
Goals under pressure?
With the presentation of the console at the beginning of April, analysts expect an official launch of the Switch 2 in May, or even June. The new machine would then not contribute to Nintendo's results for its current financial year, ending at the end of next March.
Which could put pressure on its results. Nintendo, for this 2024-2025 financial year, plans to generate 1,350 billion yen (8.4 billion euros) in revenue and 360 billion yen in operating profit.
Quoted by Nikkei Asia, Naruhito Miki, analyst at Nomura Securities had assumed a release of the Switch 2 in March. If this console is released in the next financial year (2025-2026, therefore), the analyst estimates that Nintendo could miss its target of 360 billion yen in operating profit.
Released in 2017, the Switch has enjoyed significant popular and commercial success. The console was then buoyed by the quality of certain games released shortly after its launch, notably “Zelda Breath of the Wild”, considered one of the best games of all time.
At the latest tally communicated by Nintendo, 146.04 million Switches have been sold worldwide, with also 1.31 billion games. It is the third best-selling console of all time, behind the Playstation 2 and the Nintendo DS.
It remains to be seen whether the Switch 2 will be able to reproduce such success. “We do not believe the new console will be as successful as the Switch, and we see potential profit-taking after the announcement,” wrote Yijia Zhai, an analyst at Macquarie Group in a note mentioned by Bloomberg in January 2024.
Quoted by CNBC, analysts at Moffett Nathanson explained at the same time that it was unlikely that the Switch 2 would “equal or exceed the Switch”, arguing that the Nintendo console had benefited from the fact that people had bought game consoles all together. by staying at home during the Covid-19 pandemic.
Julien Marion – ©2025 BFM Bourse
