February 25, 2024, Shanghai Nintendo Switch game console store.
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Nintendo said on Wednesday it will allow current Switch games to be played on the successor to the popular console, as it looks to spark interest in the highly anticipated device among its current user base.
After the news was announced, Nintendo’s shares closed up 5.8% in Tokyo on Wednesday.
“Investors see this as a sign that Nintendo’s next device won’t be a risky experiment, but a continuation,” Serkan Toto, CEO of Tokyo-based gaming consultancy Kantan Games, told CNBC.
“I believe investors want Nintendo to take the iPhone approach and incrementally improve upon a successful product rather than trying to reinvent the wheel with each new console generation.”
Backward compatibility of games is crucial for console manufacturers for a few reasons: First, when a new console launches, they usually don’t have a huge selection of games to choose from. Offering older games for the new Switch will enhance the device’s appeal in this regard.
Second, Switch users who are currently considering purchasing new games before the new console is released may hold off until after the new console debuts. Making current games playable on the Switch’s successor could eliminate this concern.
The Switch is Nintendo’s second-best-selling console in history, behind only the Nintendo DS.
But demand for the Nintendo Switch, which was first released in 2017, is slowly starting to decline – albeit at a high level. Investors have been waiting for more details about the console’s successor, which the company said it would announce in its fiscal year ending in March 2025.
Last year, Nintendo managed to breathe new life into the nearly eight-year-old console by releasing games involving top brands like Zelda and Pokemon and expanding into areas like movies.
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