Nintendo shares tumble as Switch 2 teaser disappoints

Nintendo shares tumbled as much as seven percent on Friday after the Japanese games giant failed to impress with a teaser video of its hotly awaited Switch 2 console.

The brief clip released Thursday showed a gadget that is bigger but broadly similar in appearance to the original hybrid Switch, which can be handheld or connected to a television.

Nintendo did not provide technical specifications such as screen resolution or processing power for the sleek-looking machine, which will be available in 2025 for an undisclosed price.

This kept gamers and analysts guessing until a live-streamed presentation on April 2 and subsequent real-world "experience" events in major cities worldwide the following days.

The stakes are high for the eagerly awaited announcement, with gaming websites in recent weeks reporting on "industry whispers" and glimpses of purported prototypes.

The first Switch has sold more than 146 million units since its launch in 2017, making it the world's third-bestselling console after Sony's PlayStation 2 and Nintendo's DS.

In a YouTube reaction video, Krysta Yang of the Kit & Krysta Podcast said the flood of unofficial previews and rumors may have spoiled the surprise.

"I guess because of all the information already out there, maybe people were just like, 'this is what I expected'," she said.

"I'm sure there's going to be more details that are fun and exciting, hopefully, and more games that we'll see in the coming months."

Nintendo's share price has also risen strongly recently, gaining more than 12 percent in the last half-year.

Investor concerns

The Switch 2's screen is larger than the overhauled detachable "Joy-Con" controllers, which snap on—possibly with magnets—rather than slide into position as before.

Eagle-eyed gaming websites noted what they said appeared to be mouse-like functionality for the Joy-Con, a mysterious extra button, and a new USB-C port.

The key will be the games, and Nintendo's two-minute trailer also showed off a new version of the long-running Mario Kart series on the new console's built-in screen and a TV.

The previous installment of the game, "Mario Kart 8", has sold more than 64 million copies.

The company said the new machine "plays Nintendo Switch 2 exclusive games, as well as both physical and digital Nintendo Switch games", which would fulfill a November promise of backward compatibility.

However, it added that "certain Nintendo Switch games may not be supported on or fully compatible with Nintendo Switch 2," promising further details.

Bloomberg Intelligence technology analyst Nathan Naidu said while the new Mario Kart game was a "bright spot," investors could be concerned about the release timeline.

"As Switch 2's release will be at least three months behind its predecessor, it might fail to top the 15 million units the Switch achieved in its first full year," he said.

With sales of the original Switch falling, Nintendo had promised to unveil the new console by the end of March.

This photo, taken on January 13, 2023, shows a guest taking a picture with Mario during a preview of Super Nintendo World at Universal Studios in Los Angeles, California. Once confined to rectangular screens, chirpy plumber Mario and pointy-eared Princess Zelda are popping up in theme parks and toy stores as Nintendo goes all out to win non-gamer fans. Photo by Chris Delmas / AFP

No pressure

Serkan Toto from Tokyo firm Kantan Games said that making the Switch 2 "just a bigger and better version of the original console... might be all that Nintendo needs".

"There was no pressure from gamers for Nintendo to reinvent the wheel," Toto told AFP.

"Gamers are surely not blown away by the reveal like they were when the original Switch was shown for the first time, but I think year-one demand at least will be very high."

The Kyoto-based company has been diversifying into theme parks and funding films based on its characters, such as the vast 2023 live-action hit "The Super Mario Bros. Movie."

"However, Nintendo still generates approximately 91 percent of its revenue from its Nintendo Switch business, which shows the importance of the Switch 2," said Darang Candra, an analyst with games market research firm Niko Partners.

In afternoon trade, Nintendo shares were down 4.84 percent, paring its earlier steep losses.