The Nintendo Switch game console store in Shanghai, Feb 25, 2024.
- Nintendo will allow current Switch games to be played on the hit console's successor, as it looks to drum up excitement among its current user base for the highly-anticipated device.
- Shares of Nintendo closed 5.8% higher in Tokyo on Wednesday.
- Backward compatibility of games is critical for console makers when they launch new devices.
Nintendo on Wednesday said it will allow current Switch games to be played on the hit console's successor as it looks to drum up excitement among its current user base for the highly-anticipated device.
Shares of Nintendo closed 5.8% higher in Tokyo on Wednesday, after the announcement.
"Investors think this is a sign Nintendo's next device will not be a risky experiment but rather a continuation," Serkan Toto, CEO of Tokyo-based games consultancy Kantan Games, told CNBC.
Get top local stories in DFW delivered to you every morning. >Sign up for NBC DFW's News Headlines newsletter.
"I believe investors want Nintendo to adopt the iPhone approach of gradually improving a winning product instead of trying to reinvent the wheel with every new console generation."
Backward compatibility of games is critical for console makers for several reasons: firstly, when new consoles launch, they often do not have a huge amount of games to choose from. Making older games available for the new Switch will boost the device's appeal on this front.
Secondly, current Switch users who are thinking of purchasing new games ahead of the new console launch may hold off until after its debut. Making current games playable on the Switch's successor removes that concern.
Money Report
The Switch is Nintendo's second-best selling console in history, behind the Nintendo DS.
But demand for the Nintendo Switch, which was first released in 2017, is slowly beginning to fade — albeit from high levels. Investors have been waiting for more details about the console's successor, which the company said it will announce in its fiscal year ending March 2025.
Nintendo managed to breathe new life into the nearly eight-year-old console last year by releasing games involving top brands like Zelda and Pokemon, as well as expanding into areas like movies.
