1 day Ago By Joe Gallop
Nintendo’s stock has soared to its highest level in seven years ahead of today’s highly anticipated reveal of the Nintendo Switch 2, setting the stage for a potential market shake-up. Investors are bracing for the official details, with high hopes that the next-generation console will drive another boom for the Japanese gaming company. However, with the stock already riding a wave of speculation, the question remains: Can Nintendo maintain its momentum? Nintendo shares have climbed approximately 25% in the past year, briefly pushing the company’s market capitalisation above $100 billion (A$152 billion) for the first time.
This surge has outpaced Japan’s broader Topix benchmark, reflecting strong investor confidence in the Switch 2’s potential. But the stakes are high. Short interest has also spiked, indicating that some investors believe the stock is overvalued and could drop post-reveal if expectations aren’t met.
Analysts warn that Nintendo’s share price may already reflect the anticipated success of the Switch 2, leaving little room for further upside unless the console delivers groundbreaking innovations. Nintendo has remained tight-lipped about the specifics of the Switch 2, but analysts expect today’s reveal to clarify key details such as pricing, game lineup, and compatibility with third-party titles. Equity analysts suggest that if the Switch 2 is priced at $449 (AUD 680) or $499 (AUD 755), it could be a tough sell for consumers, particularly given the added uncertainty of potential U.
S. tariffs. They emphasise that a strong game lineup and backward compatibility will be essential to justify the cost.
Industry watchers believe that Nintendo will emphasise first-party software to drive early adoption. Rumours suggest new entries in the Mario Kart and Pokémon franchises, both of which have historically been system sellers. Analysts also highlight the importance of third-party support, as compatibility with blockbuster titles from Sony and Microsoft’s platforms could help expand the Switch 2’s audience.
Retailers are already anticipating a rush on pre-orders, with reports suggesting that initial stock could sell out within hours. According to Insider Gaming, internal documents from a major US retailer indicate that pre-orders are set to open on April 9, one week after today’s reveal. Despite Nintendo allegedly stockpiling units, supply constraints may lead to shortages similar to those seen during the original Switch’s launch.
Beyond the console itself, Nintendo’s stock price has also been fueled by the success of its broader intellectual property. The Super Mario Bros. Movie, produced in partnership with Comcast’s Universal Pictures, was a box office hit in 2023, and a sequel is slated for release next year.
Additionally, Super Nintendo World theme park expansions in Japan, the US, and soon in Florida provide new revenue streams beyond traditional gaming. These ventures add resilience to Nintendo’s business model, ensuring that even if hardware sales fluctuate, its IP remains valuable. With expectations sky-high, today’s reveal will be a critical moment for Nintendo.
History suggests that post-announcement profit-taking is likely – after the original Switch was unveiled in January 2017, shares dropped 6% in the following week. Regardless of short-term volatility, Nintendo’s ability to deliver strong software and capitalise on its growing entertainment empire will determine whether it can sustain its stock rally. All eyes are on today’s announcement – will the Switch 2 be a game-changer or just another iteration?.
