Berliner Boersenzeitung - Nintendo aims to match Switch success with new console

Featuring a bigger screen and more processing power, the Switch 2 is an upgrade to its predecessor, which has sold 152 million units since launching in 2017 -- making it the third best-selling video game console of all time.

But despite buzz among fans and robust demand for pre-orders, headwinds for Nintendo include uncertainty over US trade tariffs and whether enough people are willing to shell out.

The Switch 2 "is priced relatively high" compared to the original device, company president Shuntaro Furukawa said at a financial results briefing in May.

"So even if there is momentum around the launch, we know it will not be easy to keep that momentum going over the long term," he warned.

Sales of the Switch, which can connect to a TV or be played on the go, were boosted by the popularity of games like "Animal Crossing" as a pandemic lockdown pastime.

The Japanese company forecasts it will shift 15 million Switch 2 consoles in the current financial year, roughly equal to the original in the same period after its release.

The new device costs $449.99 in the United States, over a third more than the Switch. A Japan-only version is cheaper, at 49,980 yen ($350).New Switch 2 games such as "Donkey Kong Bonanza" and "Mario Kart World" -- which allows players to go exploring off-grid -- are also more expensive than existing Switch titles.

Most original Switch games can be played on the Switch 2, and some Switch blockbusters such as "Zelda: Breath of the Wild" will have enhanced editions released for the new incarnation.

- 'Super excited' -

"People were a bit shocked by the price of 'Mario Kart World', the first $80 game that we've ever seen," said Krysta Yang of the Nintendo-focused Kit & Krysta Podcast.

While the company is "going to have to do some work" to convince more casual gamers that it's worth upgrading, Nintendo fans are "super excited", she told AFP.

The Switch 2 will have eight times the memory of the first Switch, and its controllers, which attach with magnets, can also be used like a desktop computer mouse.

Although the new console is not radically different, "a lot of people (are) saying, 'this is what I wanted, I wanted a more powerful Switch -- don't mess with a good thing'," said Yang, a former Nintendo employee.

New functions allowing users to chat as they play online and temporarily share games with friends could also be a big draw, said David Gibson of MST Financial.

"It's a way to appeal to an audience which has got used much more to the idea of streaming games and watching games, as well as playing games," he told AFP, predicting that the Switch 2 will break records in terms of early sales.

And success is crucial for Nintendo.

While the "Super Mario" maker is diversifying into theme parks and hit movies, around 90 percent of its revenue still comes from the Switch business, analysts say.

- Tariff trouble? -

Nintendo delayed pre-orders for the Switch 2 in the United States by two weeks as it assessed the impact from President Donald Trump's global assault on free trade.

But its pre-orders have since sold out in the US market and elsewhere, with the company boasting of particularly high demand in Japan.

Furukawa said in May that Nintendo's financial projections are based on the assumption of US tariffs of 10 percent on products produced in Japan, Vietnam, and Cambodia, and 145 percent on China.

"Hardware for North America is mainly produced in Vietnam," he added.

Trump's hefty so-called "reciprocal" tariff of 46 percent on goods from Vietnam is on pause, while those on China have been slashed.

Tariff uncertainty could in fact push consumers to buy a Switch 2 sooner, because they are worried that the price could go up, Yang said.

Charlotte Massicault, director of multimedia and gaming at the French retail giant Fnac Darty, told AFP that pre-sale demand has been "well above what we imagined".

"For us, this will be a record in terms of first-day sales for a games console," she said.

The Switch 2 is "less of a family-focused product, and more of a 'gamer' product" compared to the Switch, she said.

"That's what Nintendo wanted, and it works."

(G.Gruner--BBZ)