It's been nearly seven years since Nintendo last launched a new console, and according to one new rumor, we may need to wait even longer until we see new hardware from the company.
Nintendo has informed third-party game developers that it will likely delay the Nintendo Switch 2 to early 2025, Bloomberg is reporting, citing sources claiming to know its plans. Nintendo had earlier told developers it would launch the new console at the end of 2024.
Investors weren't happy to hear the news, and the gaming giant's shares plunged nearly 6% soon after Bloomberg reported on the apparent delay. Their concern over the news was well-placed, according to Circana analyst Mat Piscatella, who told Tech Times that a hardware delay to 2025 could make for a challenging year for Nintendo.
"If new Nintendo hardware is not released in 2024, it will likely make for a tough year," Piscatella said. "There are a few games announced for Switch this year, but nothing that would offset the push of a new hardware launch."
Despite that, IDC analyst Lewis Ward told Tech Times that Nintendo may be willing to weather a tough year if it knows customers will come out in droves early next year when the Switch 2 finally launches. Nintendo just needs to be ready to go through tough times before things get better.
"Nintendo's console business will hit a lull in the fourth quarter," said Ward. "Instead of buying new hardware and games this holiday season, a significant portion of their customers will now wait for the latest hardware and the launch titles that will accompany it. So, this fourth quarter will be down by a lot relative to the fourth quarter of 2023, but the first quarter of 2025 is also likely to be up by a lot relative to the first quarter of 2024. "
What to Expect from the Nintendo Switch 2
It's difficult to say for sure exactly what Nintendo has planned, considering the company hasn't even confirmed the Switch 2 exists. So far, we've been left to rumors from across the Internet that say the device could feature better graphical capabilities, a nicer display, and the possibility of long-sought 4K support.
It's unclear what may have caused the Switch 2's delay, and no one is clear on what may have happened. Omdia Senior Analyst James McWhirter ventured in a Tech Times interview that the games themselves aren't projected to be ready in time for launch - a "gut feeling" that Ward agrees with.
If anything, Piscatella says, the Switch 2's delay is "all speculative at the moment."
A Struggling Video Game Industry?
Whatever the case, it also complicates the broader video game industry, analysts say. Piscatella had projected, with the Switch 2 launch, a modest increase in U.S. consumer spending on video games this year, driven by the hardware's release. Now, though, he's revising his estimates.
Without the Switch 2, Piscatella says, we can expect a "potentially mid-to-high single-digit or even (in the worst case) low double-digit percentage decline" in U.S. consumer spending on video games this year. Total U.S. consumer spending on video games hit $57.2 billion last year, according to Circana, up from $56.6 billion in 2022.
According to Omdia's McWhirter, the effects of a possible decline could be felt in different ways, depending on the company. Chief among them could be the companies that had hoped to make games and hardware for the Switch 2.
"Third-party publishers and developers that planned to support Switch 2 with launch window software in 2024 will see declines in their software revenues," McWhirter said. "Console hardware sales will (also) be down in 2024, directly impacting peripherals revenue as demand for new controllers is impacted in the absence of a new hardware platform."
Sony and Microsoft Are Watching From Afar
With Nintendo and third parties all suffering from the Switch 2's apparent delay, and with the broader game industry seeing revenue declines, it may be difficult to see any winners coming out of this. But Microsoft and Sony may not be worried in the least, according to the analysts.
"Over 80 percent of Nintendo Switch games sales are already first party or co-developed with The Pokémon Company," said Ward. "Very few console gamers are also going to buy a PlayStation 5 or the latest Xbox console just because Switch 2 got delayed by a quarter."
Looking ahead, there's reason for anyone to be optimistic about the future of the video game industry. With reports mounting that Grand Theft Auto VI will hit store shelves in 2025, and now word that the Switch 2 may be delayed to early next year, there's reason to believe 2024 will be just a small speed bump for the broader industry.
"[Next year] is looking like it might set a new all-time high for the market," Piscatella told Tech Times. "So as important as it is to be prepared for what's likely to be a tough year this year, the market has by no means seen its peak, and there's much to be optimistic about looking to 2025 and beyond."
Don Reisinger is a longtime freelance writer who has written on topics as far-ranging as technology and business to science topics. His work has appeared in a variety of publications, including Fortune, Inc., The New York Times, Business Insider, Tom's Guide, and many others. Follow him at https://muckrack.com/donreisinger and https://twitter.com/donreisinger
