The Switch could become Nintendo’s iPhone, investment firms think

  • Investment firms assume that Nintendo will develop the Switch further
  • The advantage would be that the user base is preserved
  • Apple’s release of new iPhone models serves as a comparison

Two investment firms are convinced that the Switch could develop into Nintendo’s iPhone. In the sense that it breaks out of the classic hardware cycle.

For Nintendo, the console is an enormous success, the share price climbed 30 percent this year and could well reach a new record high.

Any new switch models could make the company backwards compatible with all previous games, while increasing performance and adding new features.

“With each generation of consoles, the installation base is reset to zero and the profitability is also essentially reset to zero,” Toan Tran of 10 West Advisors told Bloomberg.

With Nintendo releasing a more powerful switch every few years, similar to Apple’s iPhone, one can leave the classic hardware cycle behind. “You can continuously have an installation base of, say, 100 million consoles that will evolve over time,” he says.

At the beginning of the year, the company had already emphasized that the switch could have a longer lifecycle than previous consoles.

With the Switch Lite, Nintendo has already released a second model of the console, and rumors have it that a more powerful version is also in the works. In reports, there was talk of a 4K-capable model of the Switch planned for early 2021. Most recently, Nintendo is said to have asked development partners to adapt games to 4K. And the name Switch Pro appeared on the Media Markt website in Poland.

It wouldn’t be completely new for Nintendo to extend the lifecycle of its hardware, considering the different Game Boy, DS and 3DS models.

Ryan O’Connor of Crossroads Capital told Bloomberg that he was “convinced” that Nintendo is going this way with the Switch.

Crossroads Capital invested in Nintendo in April 2019, citing their “iterative hardware model” as one of the main reasons for this.

“Nintendo has worked hard to completely eliminate this cyclical volatility by creating a console platform that can be effective and last forever,” it said in a statement at the time. “This means that Nintendo’s most valuable asset – its installed base of console users – never has to be reset to zero, as has been the case every five to six years in the past.”

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