Nintendo stock falls as investors worry Switch 2 won’t release until next year

Stocks of Japanese video game companies nintendo (NTDOY -5.04%) It fell on Tuesday after Bloomberg reported that the company would delay the launch of its new hardware device, the Switch 2. The report came out Friday evening after the markets closed.

And since the market was closed on Monday as well as the weekend, investors were unable to react until today. As of 1:50 PM ET, Nintendo stock was down 5%.

What’s happening with Switch 2?

First, investors need to understand that the notoriously tight-lipped Nintendo hasn’t even announced its Switch 2 console yet.

Nintendo launched its latest console, the Nintendo Switch, seven years ago, and as of December 2023, it has sold 139 million units. It’s an impressive achievement for the Nintendo Switch. However, after all this time, both investors and analysts were expecting the new console to be released in 2024.

Nintendo has told video game publishers not to expect new consoles until after March 2025, according to Bloomberg’s anonymous sources.

This is just a few months later than analysts had expected for Nintendo’s new console, which sounds like a minor detail worth ignoring. However, the market is reacting very negatively to this news as it follows the important holiday shopping season in March.

What should investors do now?

Although it doesn’t offer much commentary, I think it’s logical to assume that Nintendo is working on its next-generation video game console. But I don’t assume the company is having problems with development. We’re working hard to make sure your Switch lasts as long as possible.

Nintendo executives say in a press release: The company recently stated that its goal is to “continually launch new products so more consumers can play Nintendo Switch for longer and maximize hardware sales.”

Considering sales are still strong and profits are high, Nintendo will likely extend the life of its current Switch console a bit more and release a successor when it deems the time is right. This could lead to a slowdown in growth next year. But I don’t think that’s a cause for long-term concern.