Nintendo is unlikely to provide investors with an update on the successor for its popular gaming console the Switch in its upcoming earnings report despite waning demand for the device, analysts at Wedbush believe.
The Kyoto, Japan-headquartered entertainment company, whose franchises include Mario, Donkey Kong, Animal Crossing and Pokémon, will report first quarter fiscal 2025 earnings on Friday, August 2 before the stock market opens in North America.
The analysts do not expect news on the Switch 2 this week or anytime soon given Nintendo’s determination to keep gamers focused on the Switch 1, they wrote in a note to clients.
“Simply put, demand for the seven-year-old Switch appears to be sagging and Nintendo has yet to show its hand for various sales initiatives,” they wrote.
“We remain upbeat about the stock’s prospects over the next year given Nintendo’s early disclosure that it will make an announcement around the Switch’s successor within fiscal 2025.”
They are modelling a Switch 2 launch in the first quarter of fiscal 2026.
For Q1 2025, the quarter ending June 30, 2024, analysts see Nintendo reporting revenue of ¥270 billion and earnings per share of ¥55, compared to Street estimates of ¥290 billion and ¥71, respectively.
Switch hardware and software unit sell-in are expected to be 2.5 million and 35 million.
“We are expecting Switch units to miss our estimates, but Nintendo may still be able to deliver top and bottom line beats on favorable F/X and sales of other products,” the firm’s analysts wrote.
They repeated their ‘Outperform’ rating on the stock and awarded it a ¥9,500 price target.
Nintendo’s Japan-listed shares closed 1% higher at ¥8,342 on Monday.