The second-generation Switch is coming, and Nintendo may be more anxious than players

Author 丨 Sun Wenxuan of Snow Leopard Financial Society

Eight years later, the legendary console Switch, which has sold 150 million units around the world, is finally coming out in its second generation, but players seem to have little interest.

On January 16, the night the Switch 2 product trailer video was released, Nintendo’s iron fan Qijie (pseudonym) opened a Switch 2-themed communication group. However, many players believe that the products in the trailer do not have many surprises and are ready to wait and see. Even Qijie, who was ready to compete for the launch, couldn’t help but criticize: Nintendo’s game consoles were the worst performing products of its kind at the same time every time. rdquo;

Nintendo may be more anxious than players about the launch of this new product.

Since 2021, as market saturation has increased and products have entered the late life cycle, sales of Switch 1 have gradually declined. Nintendo, which relies on hardware to contribute nearly half of its revenue, has also continued to decline in revenue and profits.

On April 2, Nintendo will hold a Switch 2 meeting and will be officially released during the year. However, if you want to rely solely on this product to stop the decline, this century-old store still faces considerable challenges.

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As a veteran console game player, Qijie is still ready to start the game. From elementary school, junior high school, high school, college to work, Qijie has played all kinds of console products. There are more than a dozen game consoles at home, including many Nintendo models. He is curious to know whether the upcoming Switch 2 will meet expectations in terms of picture, frame number and performance improvements.

Compared with the original product, the Switch 2 has a larger size, higher definition image quality and higher performance, and has also been updated on the rocker and stand.

The trailer shows that the Joy-Con handle has changed from the previous generation’s slide snap-in design to a more convenient magnetic installation and removal method. It can also slide like a mouse, indicating that there may be a new interactive gameplay. The original small bracket has been expanded into a larger U-shaped design, which is more stable than the original version and can be adjusted at multiple angles; the rocker has been upgraded to a Hall rocker, which is expected to solve the previous generation’s rocker drift problem.

New aircraft escort masterpieces include “Mario Kart 9”. While Switch 2 has a new version of the cartridge, it is also backward compatible with the original Switch cartridge.

Screenshots of the Mario Kart 9 game

However, among the several game exchange groups where Snow Leopard Financial Society belongs, most players believe that the trailer content of Switch 2 does not have many surprises and the performance upgrade is somewhat useless.” ldquo; I still like the generation. A larger size might be better, but I don’t think it’s necessary, and a larger size may be heavier, which makes it inconvenient to hold.& rdquo; said one player.

Several players told Snow Leopard Financial News that they were looking forward to Switch 2, but would not buy a starter. A person who has worked in Switch sales advised players to wait for a while before buying because of the serious premium for the new product. An eight-year-old player also reminded that the release price of new machines is generally high and is not a good time to start.

For most players, the core criterion for whether Switch 2 is worth buying is whether there is an exclusive game.& ldquo; If there are no new games, the significance of new machines will be limited. It is better to use the first-generation products directly, and the price will be more cost-effective.” rdquo;

Wu Qing (pseudonym), an office worker who has been playing Switch console games for nearly seven years, believes that if you haven’t started the first generation, it’s okay to buy new products directly. The performance of the first generation is already very backward. After all, it has been so many years.

Nintendo game veteran player Qiqi (pseudonym) told Snow Leopard Financial News that the first-generation Switch was released in 2017, but so far there has been no hardware improvement, resulting in the picture and frame numbers being inferior to contemporary consoles. Fortunately, the price of Switch is relatively cheap, and it also takes into account the way of handheld and console play, which captures the hearts of players. Many new players can’t accept the difference in image quality after starting. He suggested comparing the image quality of Switch with other platforms before purchasing, and considering purchasing if you can accept it.

Another game practitioner told Snow Leopard Financial News that Nintendo’s game consoles are still focused on game content, not graphics and performance, so there will be little improvement.

“There is still some time before the release of the new product. Players who have not purchased a Switch can continue to buy the Switch 1 first, and then sell the Switch 1 they have after the price of the Switch 2 stabilizes. rdquo; A person in the video game recycling business suggested.

out of the circle

Founded in 1889, Nintendo initially started producing game cards. In the late 1970s, Nintendo began to enter the video game industry out of insight into entertainment market trends.

In 1983, Nintendo launched the first generation of family computer, which is the classic red and white machine. Classic games such as “Super Mario Bros.” and “Contra” have become childhood memories of a generation.

Over the past few decades, Nintendo has launched two revolutionary products that have had a profound impact on the console game industry.

The first was the Wii, the seventh-generation home game console in 2006. It introduces somatosensory operation technology, allowing players to operate actions by waving the controller, completely changing the traditional game interaction method, thus attracting a large number of home users. As of 2021, Wii’s global sales have exceeded 100 million units, making it one of the best-selling products in the history of game consoles.

One host, three forms. Photo source: Nintendo official website

The second model is Switch launched in 2017.

Photo source: Nintendo official website

At that time, Wii’s successor product, Wii U, lacked innovation and sales were poor, and Nintendo’s market share was greatly eroded by Sony and Microsoft. Nintendo learned from the lesson and innovatively launched the first console Switch, which is a two-in-one handheld and home game console. It can switch between home and portable, making the market shine.

In July of that year, Switch sales surpassed Sony’s PS4 and Microsoft’s Xbox One.

During the epidemic at home, Switch once again went out of circulation around the world. The casual game “Animal Forest Friends Club” exploded, with global sales of 13.41 million copies in just six weeks after its release.”Fitness Circle Adventure” was also very popular, resulting in the shortage of Switch, the shortage of stocks in many places, and the price of the console has risen sharply.

“Fitness Circle Adventure” Photo source: Nintendo official website

As of the end of 2024, Switch’s cumulative sales exceeded 150 million units, ranking third in global console sales, and driving sales of 1.359 billion game software.

It can be said that this legendary console has single-handedly restored Nintendo’s market position.

Nintendo’s U.S. officials once attributed the Switch’s popularity to three reasons: the core concept of playing games anytime, anywhere, a strong lineup of games such as “The Legend of Zelda: Breath of the Wilderness”, and good third-party support.

Relevant reports show that from the perspective of the global console game market, Sony’s PlayStation series and Microsoft’s Xbox series compete fiercely in the high-end market, focusing on strong performance and game ecosystems. Nintendo has occupied the innovative console and casual player market through the Switch series. The three major companies compete for market share through innovative means such as exclusive games, cloud games, and augmented reality.

But starting in 2021, Switch sales will begin to decline. In the first half of fiscal year 2025 (April 1-September 30, 2024), a total of 4.72 million Switch hardware units were sold, a year-on-year decrease of 31%; game software units were sold 70.28 million units, a year-on-year decrease of 27.6%. From October to December 2024, Switch sales fell 43.5% year-on-year to 4.81 million units.

Not just Nintendo, global console sales are in a downward trend.

The “2024 Global Console Game Market Survey Report” released by China Audiovisual and Digital Publishing Association shows that in 2024, the actual sales revenue of the global console game market will be approximately 326.727 billion yuan, a year-on-year decrease of 2.57%. Poor sales of game hardware are the main factor in the reduction of market size.

The report pointed out that mainstream game console equipment sales have entered a long-tail recession period, resulting in a decline in hardware sales revenue. Only the release of new game console devices is expected to stimulate the resumption of hardware sales.

Can Switch 2 do it?

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For Nintendo, which contributes nearly 50% of hardware sales, the success or failure of Switch 2 is crucial.

Starting from 2022, Nintendo’s total revenue will continue to decline, and its net profit situation will not be optimistic. Financial report data shows that in the first half of fiscal year 2025, Nintendo’s turnover was 523.2 billion yen, down 34.3% year-on-year; net profit was 108.6 billion yen, down 59.9% year-on-year. The company attributed the decline in revenue to weak sales of game hardware and software.

In recent years, Nintendo has been committed to using classic IP to explore new revenue channels, including shooting movies around classic IP, creating theme parks, and entering mobile games. But this is only an assist, and the company’s performance still depends on the main business to support it.

Therefore, Nintendo is eager to launch a new Switch 2 to save the company’s performance from recession.

But it’s not easy.

From the perspective of the market environment, console games face severe challenges from PC games and mobile games.

A report recently released by investment strategy firm Epyllion stated that starting from 2021, the growth of console games will slow down, while PC games will continue to grow, becoming a highlight. If mobile mobile games are not included, PC games account for most of the gaming industry’s revenue.

Epyllion believes that PCs have many advantages compared with hosts, such as stronger compatibility, direct access to web browsers, social media, live streaming software, etc., and stronger performance. More importantly, the growth of PC games is due to the cross-platform release of console exclusive games in the past and the advancement of portable handheld consoles such as Steam Deck. Hundreds of millions of children grew up playing Roblox, and it is unlikely that they will ask their parents for thousands of yuan to buy a console in order to play 3A games.

An industry insider told Snow Leopard Financial News that the circles of PC games and console games have merged, and many people play both console games and PC games.

“Nowadays, PC games and console games are basically the same circle.& rdquo; Qijie bluntly said that in recent years, game consoles have become less important than before. PC players can play most games on Steam, and the price is cheaper. When many game manufacturers release games, they release three versions of PC, PS5 and Microsoft Xbox at the same time.& rdquo;

Mobile games are also eroding the market for console games. More and more light players are more willing to play games on their mobile phones, but are happy to use higher-configured PCs to play 3A masterpieces when they return home. It is not easy for console manufacturers to balance both light and core player groups.

In a console market where territory is gradually eroded, Nintendo still faces fierce competition from Sony and Microsoft.

A report from market research firm Omdia believes that in 2025, Sony’s PS5 will continue to maintain its leading position in terms of game console usage and is expected to become the best-selling product in 2025, accounting for 40% of total console sales.

Many players mentioned that Sony’s PS series consoles far exceed Switch in terms of performance and graphics.& ldquo;Switch’s screen is only 1080P, and frames will drop when playing.” rdquo;

Photo source: PS5 official website

XBOX SERIES X Photo source: XBOX official website

Another key question is that the Switch 2 product itself still faces a lot of uncertainty: How many wonderful exclusive games are there? How much has the performance and picture improved? Is the price attractive?

The above-mentioned game practitioners told Snow Leopard Financial News that there will not be many exclusive games for the new machine and will need to be accumulated step by step. The specific pace depends on Nintendo’s pace.” ldquo; Buying machines is mainly to play games. I spend thousands of yuan to improve the picture and performance. I have to evaluate it yourself.” rdquo;

Cover source 丨 Nintendo official website