The highly anticipated successor to the Nintendo Switch, eagerly awaited by both fans and investors, is projected to face challenges in suring the sales of the existing console, as per insights from analysts in a recent Bloomberg article (acknowledgment to GoNintendo).
The buzz around the new system has propelled Nintendo’s stock to unprecedented heights recently. Yet, analysts from Goldman Sachs, CLSA Securities, and Macquarie Group forecast a tough journey ahead for Nintendo to outdo the sales and interest garnered by the Switch since its launch in 2017. To date, the Switch has achieved sales of over 132 million units as of November 2023.
Macquarie Group analyst Yijia Zhai has downgraded Nintendo’s stock rating to ‘neutral’, expressing skepticism about the console’s potential to eclipse the Switch’s success and anticipating possible profit-taking post-announcement.
Goldman Sachs analyst Minami Munakata commented on the inflated stock price, emphasizing doubts that the forthcoming hardware cycle’s profits will exceed those of the Nintendo Switch era. Munakata also speculated that the ‘Switch 2’ may not broaden Nintendo’s customer base unless it introduces groundbreaking concept hardware as opposed to being a mere successor.
Despite the bleak predictions, it’s worth noting that the forthcoming Nintendo console could still attain remarkable success. The Switch’s sales figures place it just behind the DS and PlayStation 2 in the historical console sales leaderboard.
While the speculation that ‘Switch 2’ may not outperform the Switch is not particularly bold, it reflects a reasoned perspective based on the current data. Nonetheless, the excitement surrounding a new console reveal is palpable among fans and is significantly impacting market dynamics. As the Switch approaches its eighth anniversary, the gaming community and investors are keen to discover what Nintendo has in store next from its Kyoto headquarters.
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