Nintendo Plans Upgraded Switch Console and Major Games for 2021
(Bloomberg) -- Nintendo Co. plans to debut an upgraded model of its Switch console next year along with a lineup of new games, people familiar with the matter said, ceding 2020’s holiday spotlight to rival devices from Sony Corp. and Microsoft Corp.
The specifications of the new machine have yet to be finalized, though the Kyoto-based company has looked into including more computing power and 4K high-definition graphics, people briefed on the strategy told Bloomberg News, asking not to be identified because it’s private. Nintendo faces stiff competition for gamers’ attention this fall as the PlayStation 5 and Xbox Series X are set to arrive in time for the shopping season.
The release of the upgraded Switch would be coupled with, or followed by, a slew of games from Nintendo itself and related outside studios, the people said. Those games would address a wide range of players, from casual gamers seeking small doses of escapism to more devoted fans putting in marathon gaming sessions. The focus on next year’s pipeline explains Nintendo’s relatively quiet software release schedule so far this year, the people said.
The gaming giant has seen record-breaking hit Animal Crossing: New Horizons and the protracted Covid-19 pandemic spark a rally of more than 70% in its share price since the game’s release in March.
The company has struggled to keep up with demand for its existing Switch and Switch Lite, though it said earlier this month that its production bottleneck has largely been resolved. This has been helped by plunging smartphone demand releasing some of the pressure on suppliers. Assembly of Nintendo’s next console isn’t expected to begin until next year because production partners are busy with making the current models, according to the people informed.
Taiwan’s Economic Daily News first reported the new console plans on Monday. A Nintendo spokesman declined to comment.
The video game industry saw an unprecedented surge over the quarter ended June, with big names like Sony, Square Enix Holdings Co., Tencent Holdings Ltd. and Nintendo itself far outperforming analyst expectations as the pandemic kept millions of people homebound for extended periods of time. Those companies have sounded a note of caution about the momentum continuing, though data from Japan-based research firm Famitsu suggests demand for the Switch and Animal Crossing remained strong in August.
Nintendo has sold 61 million Switch consoles in the period between its March 2017 launch and the end of June this year. Extending the console’s lifespan with a specced-up version is likely to make it the company’s longest-lived console generation.
“With Nintendo Switch about to begin its fourth year, the situation does feel a little different from the home consoles we’ve offered in the past,” Nintendo President Shuntaro Furukawa said in January, when he added a note not to expect new hardware in 2020. “In terms of hardware, I think we will be able to consider a variety of ways to expand in the future.”
The Wii is Nintendo’s biggest home console hit to date with lifetime sales of 102 million units, while the portable Nintendo DS has reached 154 million units -- and at least one analyst expects a refreshed Switch model can boost sales enough to make it the company’s most successful hardware generation.
“The Switch will surpass the Wii’s sales even without an upgrade,” said Ace Research Institute analyst Hideki Yasuda. “And a sound hardware update plan would even allow the Switch to surpass the Nintendo DS handheld.”
©2020 Bloomberg L.P.