Nintendo Switch

Nintendo Co. NTDOY -0.96% plans to launch two new versions of its Switch gaming console as early as this summer, people familiar with the matter said, as the company seeks to sustain sales momentum for the product going into a crucial third year.

One version will have enhanced features targeted at avid videogamers, although it won’t be as powerful as Sony Corp.’s PlayStation 4 Pro or Microsoft Corp.’s Xbox One X, according to parts suppliers and software developers for Nintendo who have access to a prototype of the machine.

The other version is a cheaper option for casual gamers that Nintendo sees as a successor to its aging hand-held 3DS device, the suppliers and developers say.

The new models are likely to be unveiled at the E3 videogame Expo in Los Angeles in June and possibly released a few months later, one person familiar with Nintendo’s plans said. Kyoto-based Nintendo declined to comment.

The Switch, introduced in March 2017, has been central to Nintendo’s recent business success. The company earns more than 80% of its total revenue from Switch hardware and software sales. Investors are focused on how long the console can remain a profit driver.

Industry watchers expect sales for the Switch to begin declining soon. Analysts polled by Visible Alpha, a provider of market forecasts, anticipate on average that 17.9 million units of the Switch will be sold in the fiscal year ending this month, followed by 17.4 million in the following year.

Videogame-hardware makers generally come out with new consoles every five to six years, and it is common for them to update the devices in the middle of their life cycles to keep the momentum going. Sony introduced the PlayStation 4 in November 2013 and updated it with a less-expensive version in September 2016 and a high-end model two months later. Sales of the PlayStation 4 remain strong.

Nintendo’s suppliers and game developers have been talking with their investors about the new Switch machines for several months. People who have used the devices say they aren’t just similar-looking new versions with a higher or lower performance.

Prices for the new Switch models couldn’t be learned. To cut costs for the cheaper version, Nintendo plans to eliminate some of the functions used in the original Switch console, such as a vibration feature in its controllers, according to Nintendo suppliers.

“The company judged the new Switch models won’t need the vibration feature because there wouldn’t be many games released using the full benefit of it,” one official familiar with the plans said.

Nintendo is also adjusting its suppliers for the new models. Sharp Corp. , an Osaka-based company that had long supplied components to Nintendo videogame machines but failed to win a deal for the original Switch, is expected to provide liquid-crystal displays for the new Switch machines, people familiar with the new models said. Sharp declined to comment.

Suppliers and third-party game developers say Nintendo is preparing to release new game titles from well-known franchises, such as “Animal Crossing” and “Pokémon,” to bolster Switch hardware sales. Nintendo has said it plans to launch two new games from the Pokémon franchise in late 2019.

“Some people say sales of Nintendo’s devices usually weaken in the third year, while others say games to be released this year are stronger than ever before,” one executive at a Nintendo supplier said. “I honestly don’t know how things will turn out, but I have my fingers tightly crossed.”

– Eurogamer has heard many of the same things as The Wall Street Journal has
– With the first new model, Nintendo is hoping to cater to the same two audiences it eventually evolved 3DS to serve with 2DS and New 3DS XL
– Nintendo is keen to move casual gamers still using 3DS over to Switch, many of them young fans who have been bought cheaper versions of the 3DS
– Nintendo apparently wants to recapture the 2DS value proposition
– The unit’s design will be sturdier than the current Switch model in order to be “kid-proof”
– Costs will be driven down by the removal of several features
– Nintendo has designed its budget Switch for an audience which uses it in handheld mode only
– The other new souped-up Switch will be comparable to the bump received by the 3DS upon its New 3DS relaunch
– No suggestion this model might remove the TV screen docking