Nintendo Stock Slides Amid Speculation on Switch 2 Delay

Nintendo's shares experienced a downturn on Tuesday following reports from Bloomberg suggesting the company's next-gen gaming console, the Switch 2, might face a launch delay. Post-market close on Friday, when the news surfaced, the market was already heading into a weekend pause, extending into Monday. Come Tuesday, Nintendo's stock reflected investor concerns, dropping by 5% around 1:50 p.m. ET.

The Switch 2 Anticipation

Even though Nintendo has not officially announced the Switch 2, expectations were high for its release sometime in 2024, as the original Nintendo Switch has been on the market for seven years and has sold a formidable 139 million units till December 2023. However, sources close to the matter now claim that game publishers have been informed by Nintendo not to count on the new hardware until post-March 2025.

For investors and analysts, this poses a significant shift especially because a post-March release would miss the vital holiday shopping season which historically has been a peak sales period for gaming consoles.

Investor Guidance

Despite the current silence from Nintendo, it's reasonable to speculate that the company is indeed developing its next console, aiming to extend the life cycle of the current Switch. Nintendo's management has previously stressed the goal of releasing new content to keep consumers engaged with the Switch platform longer, thereby boosting its lifespan and hardware sales.

With strong sales and high profits still on its side, it seems Nintendo is choosing to wait for the most opportune moment to introduce the next iteration. This strategic patience may result in slower growth in the short term, but isn't necessarily an alarming sign for investors with a longer time horizon.

Nintendo, Switch2, Investors