Business / Corporate

Nintendo shares climb after report of two new Switch models in works for avid and casual gamers

Bloomberg

Nintendo Co. shares had their best day in almost eight months after The Wall Street Journal reported the company plans to introduce two new models of its Switch console as early as this summer.

One of the models will have enhanced features to cater to avid gamers, while the other version is expected to be a cheaper alternative for casual players, the Journal reported, citing unidentified Nintendo parts suppliers and software developers.

Nintendo shares ended up 4.8 percent on Tuesday in Tokyo after climbing as much as 6.8 percent earlier, the most on an intraday basis since Aug. 1.

In January, Nintendo cut its forecast for Switch shipments to 17 million units in the fiscal year through March, down from an earlier projection of 20 million. The Kyoto-based company needs hit games that appeal to more consumers beyond its most loyal customers.

In an interview conducted before Christmas and was published in January, the Sankei Shimbun cited President Shuntaro Furukawa as saying the company is not considering a price cut or a new model.

“If the article is accurate, this would support our forecast of virtually flat” year-on-year Switch sales next fiscal year, Masahiro Ono and Yui Yasumoto, analysts at Morgan Stanley MUFG, wrote in a research note after the story. “The appearance of a lower-price model could also drive demand for a wider range of software.”

The new models may be launched at the E3 2019 video game expo in Los Angeles in June, with a wider release possible months later, the Journal said, citing one person familiar with the plans.

Unit sales will range between 17 million and 18 million units this fiscal year and 15 to 17 million the following year, the Morgan Stanley MUFG analysts forecast.