Gaming enthusiasts queued up on Thursday for the launch of Nintendo’s (7974.T) new Switch 2 console, which is widely anticipated to face global supply shortages due to pent-up demand for the more powerful next-generation gaming device.
“The level of demand seems to be sky-high,” commented Serkan Toto, founder of the Kantan Games consultancy.
In Tokyo’s Ikebukuro shopping district, dozens of successful applicants from an electronics retailer Bic Camera (3048.T) sales lottery lined up before the store opened to collect their devices.
“I feel like I’m going to cry,” Yumi Ohi, a 30-year-old delivery contractor, emotionally told Reuters. Ohi had missed out on other lotteries and traveled from Saitama prefecture, adjacent to Tokyo, specifically to pick up her Switch 2.
Nintendo has sold 152 million original Switch home-portable devices since its launch in 2017. The console became a gaming juggernaut with popular titles including two “The Legend of Zelda” games and the major COVID-19 pandemic breakout hit, “Animal Crossing: New Horizons.”
The Switch 2 shares many similarities with its predecessor but boasts a larger screen and improved graphics. It debuts with new titles including “Mario Kart World.”
“The much larger audience of Switch users should translate to stronger adoption in the opening part of its lifecycle,” noted Piers Harding-Rolls, an analyst at Ampere Analysis. He added that “Nintendo is better prepared this time around” to manage the high demand.
The launch of the $499.99 Switch 2 serves as a test of Nintendo’s supply chain management capabilities, particularly amidst U.S. President Donald Trump’s ongoing trade war.
Last month, Nintendo projected sales of 15 million Switch 2 units during the current financial year, alongside 4.5 million units of the original Switch.
President Shuntaro Furukawa stated that Nintendo plans to bolster production capacity to meet the robust demand and will focus on sales promotion efforts to exceed the current forecast.
“Given it’s a special occasion, I wanted to buy (the Switch 2) right away on its release date,” shared Shinichi Sekiguchi, a hotel receptionist in his thirties.
Nintendo reported receiving 2.2 million applications for its Switch 2 sales lottery on its My Nintendo Store in Japan. In the U.S., pre-orders at Target (TGT.N) sold out in less than two hours.
“You are looking at weeks or months until you can walk into a store and buy a Switch 2,” predicted Toto of Kantan Games, highlighting the anticipated scarcity.
Investor expectations for the new device are similarly high, with Nintendo’s shares trading near their highs and having gained almost 30% this year.
However, concerns exist regarding the sustained momentum for the Switch 2 after hardcore gamers have upgraded.
“The volume of first-party games on offer at launch isn’t as strong as it could be, so some more casual users may wait and see how the games available build over the next one to two years before making the leap,” cautioned Ampere’s Harding-Rolls.
