By Sam Nussey
TOKYO (Reuters) -Nintendo said it will launch its Switch 2 gaming device on June 5, with the long-anticipated successor to its hit hybrid home-portable Switch retailing for $449.99.
The Kyoto based-company on Wednesday announced more details about the Switch 2 after a reveal in January.
Analysts expect a smooth transition to the new device, which has upgraded hardware but hews closely to the form and function of its predecessor.
The Switch 2 offers a bigger screen, mouse controls and a chat function available via a dedicated button on the controller.
The device will retail for $449.99 in the United States and 49,980 yen ($334) in Japan for a Japanese language system or 69,980 yen for a multi-language version.
“The price is a bit higher than what was widely expected,” said Serkan Toto, founder of Kantan Games consultancy.
Nintendo probably took into account the current inflationary environment and the $699.99 price tag Sony put on the PlayStation Pro last year, he said.
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.
The new device “is a more premium, ambitious platform with broader software and ecosystem depth than expected,” Jefferies analyst Atul Goyal wrote in a client note.
Games announced included “Mario Kart World”, performance boosted versions of Switch “Zelda” games and classic GameCube titles for subscribers to Nintendo Online.
The Switch, which transformed Nintendo’s fortunes after the Wii U sold poorly, launched in March 2017 priced at $299.99.
One focus for investors is the strength of hardware supply after the Switch was affected by supply chain 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 before the announcement.
The Switch 2’s launch comes at a time of elevated trade tension as U.S. President Donald Trump introduces tariffs on goods imported into the United States.
The lower pricing in Japan “implies U.S. pricing factors in (the) tariff impact,” Goyal wrote.
Analysts point to changes in the industry including the rise of subscription-based services 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, which hit a high in February, fell 3% on Thursday following the announcement. The benchmark index was down 3.5%.
Nintendo “has already strongly outperformed the market,” Amir Anvarzadeh, a market strategist at Asymmetric Advisors, wrote in a note ahead of the announcement.
“We think it is unlikely that the new hardware will be big enough to justify its current share price.”
($1 = 149.6000 yen)
(Reporting by Sam Nussey; Editing by Jane Merriman and Christopher Cushing)
