Nintendo opens a new tab and is set to reveal details of its Switch 2 on Wednesday, with investors looking for the price and launch date of the successor to the portable home gaming device Switch.
Analysts expect a smooth transition to the new device, as the Kyoto-based company offers updated hardware while maintaining the shape and features of its hit predecessor.
The Switch has sold over 150 million units, and hardware updates, along with hit games like Super Mario and The Legend of Zelda, have extended its lifecycle.
Jefferies analyst Atul Goyal expects the Switch 2 to cost between $399 and $499 and to launch in May-June.
“Once the Switch 2 hits the market, we expect demand to be obvious,” Goyal wrote in a client note.
The Switch, which turned around Nintendo's fortunes after poor Wii U sales, was launched in March 2017 at a price of $299.99.
The company will provide details about the Switch 2 at the Nintendo Direct event.
Investors are focusing on the game lineup, which will be crucial for driving consumer purchases of the new device, as well as the supply power of hardware, as the Switch was impacted by production delays.
“Given the level of unfinished production on the company’s balance sheet, Nintendo is likely targeting shipments of over 10 million units in the first year,” wrote Goldman Sachs analyst Minami Munakata.
The Switch 2 launch is taking place amid heightened trade tensions, as US President Donald Trump imposes tariffs.
PlayStation maker Sony said in February it was stockpiling supplies in the US.
Analysts point to industry shifts, including the growth of subscriptions and backward compatibility of consoles, as helpful in smoothing the upgrade cycle.
“The situation is similar to the transition from PS4 to PS5, where profits continued to rise with little to no decline,” wrote Munakata from Goldman.
Nintendo shares reached a high in February and have risen by more than 10% year-to-date.
“We believe it’s unlikely that the new hardware will be large enough to justify its current stock price,” wrote Amir Anwarzade, a market strategist at Asymmetric Advisors, in a note.