The next Nintendo console might arrive in 2024
Nintendo has reportedly demonstrated the Nintendo Switch 2 behind closed doors at Gamescom last month.some trusted developers got an early look at the Switch 2 and some tech demos of how games run on the unannounced system.
There was reportedly a demo of an improved version of Zelda: Breath of the Wild that’s designed to run on the more advanced hardware inside the Nintendo Switch 2, VGC corroborated the claims and revealed that Nintendo also showcased Epic Games’ The Matrix Awakens Unreal Engine 5 tech demo running on the type of hardware Nintendo is targeting for its next console. The demo reportedly used Nvidia’s DLSS upscaling technology with ray tracing enabled, suggesting Nintendo and Nvidia are working on a significant chip upgrade for this next-gen console. in July that a new Nintendo Switch is being planned for a 2024 release.
With 43 years of making immensely popular video games under its belt, you'd think that the video game pioneers at Nintendo probably have the business of success fully figured out.
But companies must change with the times and, according to Nintendo of America president Doug Bowser, that means finding a way to engage people with the legacy brand that might never pick up a video game controller.
Bowser spoke about what the company learned this year during the Nintendo Live event in Seattle, Wa. on Sept 1, referencing the enormous box office success of the "The Super Mario Bros. Movie" as one of its key indicators that Nintendo has the ability to reach an audience beyond those that naturally reach for a controller.
"We launched The Super Mario Bros. Movie, which very quickly became the second-largest box office grossing animated film of all time at $1.3 billion," Bowser said. "We launched The Legend of Zelda: Tears of the Kingdom, which, 18 million units later after a very brief period of time, it's one of our fastest launch titles ever, and then the event today. So it's really this drumbeat of activities, entertainment-based activities where we're trying to find ways to continue to introduce more and more people, not just players, but people to Nintendo IP… So that's what we're excited about."
Bowser also spoke about the launch of Super Nintendo World at Universal Hollywood, which delivered an impressive 25% bump to Comcast's Q1 earnings this year.
"And if I think about folding into the bigger strategy, this year has really been a very unique, and I dare say banner year for Nintendo in a lot of ways," Bowser said.Nintendo also continues to benefit from the sales of its aging Nintendo Switch console, with 129.53 million units sold worldwide. That makes it the company's second best-selling console of all time, right behind the handheld Nintendo DS, which sold 154.2 million units before it was discontinued in 2014.
The success of "The Super Mario Bros. Movie" drove rumors that another big feature film based on Nintendo's flagship Legend of Zelda series was coming as well, but Nintendo hasn't made a formal announcement about that ... yet.
Gaming is in the midst of an M&A arms race. The protracted pandemic has made sure of that. Companies from all sides of the market, Microsoft, Take Two, Sony to name a few, are cutting deals to secure content. The volume and scale of those deals point to where gaming is heading - the precipice of major shake-ups across its core commercial and distribution models. Microsoft's eye bulging $69 billion deal for Activision is a testament to that shift. Costly as the deal is, it's arguably a small price to pay to secure some of the biggest franchises in gaming: Call of Duty, Warcraft, Candy Crush and Overwatch. Even more so, considering those titles span a community of 400 million active monthly players. In other words, the deal is the boldest sign yet that content is the future of gaming, not consoles.
Should you invest in Nintendo?
The question comes down to whether you are willing to pay about 40B for Nintendo's IP and potential earnings powers. To me, a company that continues to produce in-demand and profitable content is worth that price tag, especially after having generated a net profit of 432.7B yen, or $2.97B in FY2023. That's a P/E of about 13.5 after subtracting out Nintendo's current assets - not a hefty sum given everything Nintendo has going for it. Nintendo's strategy seems to be working, with The Super Mario Bros. Movie not only performing well on its own but also providing a boost to other Nintendo offerings. While there are concerns, there are also plenty of catalysts moving ahead. I am excited to see new Nintendo initiatives including more theatrical releases of their IP and their (positive) effects on the rest of the company's products.
Nintendo has reportedly demonstrated the Nintendo Switch 2 behind closed doors at Gamescom last month.some trusted developers got an early look at the Switch 2 and some tech demos of how games run on the unannounced system.
There was reportedly a demo of an improved version of Zelda: Breath of the Wild that’s designed to run on the more advanced hardware inside the Nintendo Switch 2, VGC corroborated the claims and revealed that Nintendo also showcased Epic Games’ The Matrix Awakens Unreal Engine 5 tech demo running on the type of hardware Nintendo is targeting for its next console. The demo reportedly used Nvidia’s DLSS upscaling technology with ray tracing enabled, suggesting Nintendo and Nvidia are working on a significant chip upgrade for this next-gen console. in July that a new Nintendo Switch is being planned for a 2024 release.
With 43 years of making immensely popular video games under its belt, you'd think that the video game pioneers at Nintendo probably have the business of success fully figured out.
But companies must change with the times and, according to Nintendo of America president Doug Bowser, that means finding a way to engage people with the legacy brand that might never pick up a video game controller.
Bowser spoke about what the company learned this year during the Nintendo Live event in Seattle, Wa. on Sept 1, referencing the enormous box office success of the "The Super Mario Bros. Movie" as one of its key indicators that Nintendo has the ability to reach an audience beyond those that naturally reach for a controller.
"We launched The Super Mario Bros. Movie, which very quickly became the second-largest box office grossing animated film of all time at $1.3 billion," Bowser said. "We launched The Legend of Zelda: Tears of the Kingdom, which, 18 million units later after a very brief period of time, it's one of our fastest launch titles ever, and then the event today. So it's really this drumbeat of activities, entertainment-based activities where we're trying to find ways to continue to introduce more and more people, not just players, but people to Nintendo IP… So that's what we're excited about."
Bowser also spoke about the launch of Super Nintendo World at Universal Hollywood, which delivered an impressive 25% bump to Comcast's Q1 earnings this year.
"And if I think about folding into the bigger strategy, this year has really been a very unique, and I dare say banner year for Nintendo in a lot of ways," Bowser said.Nintendo also continues to benefit from the sales of its aging Nintendo Switch console, with 129.53 million units sold worldwide. That makes it the company's second best-selling console of all time, right behind the handheld Nintendo DS, which sold 154.2 million units before it was discontinued in 2014.
The success of "The Super Mario Bros. Movie" drove rumors that another big feature film based on Nintendo's flagship Legend of Zelda series was coming as well, but Nintendo hasn't made a formal announcement about that ... yet.
Gaming is in the midst of an M&A arms race. The protracted pandemic has made sure of that. Companies from all sides of the market, Microsoft, Take Two, Sony to name a few, are cutting deals to secure content. The volume and scale of those deals point to where gaming is heading - the precipice of major shake-ups across its core commercial and distribution models. Microsoft's eye bulging $69 billion deal for Activision is a testament to that shift. Costly as the deal is, it's arguably a small price to pay to secure some of the biggest franchises in gaming: Call of Duty, Warcraft, Candy Crush and Overwatch. Even more so, considering those titles span a community of 400 million active monthly players. In other words, the deal is the boldest sign yet that content is the future of gaming, not consoles.
Should you invest in Nintendo?
The question comes down to whether you are willing to pay about 40B for Nintendo's IP and potential earnings powers. To me, a company that continues to produce in-demand and profitable content is worth that price tag, especially after having generated a net profit of 432.7B yen, or $2.97B in FY2023. That's a P/E of about 13.5 after subtracting out Nintendo's current assets - not a hefty sum given everything Nintendo has going for it. Nintendo's strategy seems to be working, with The Super Mario Bros. Movie not only performing well on its own but also providing a boost to other Nintendo offerings. While there are concerns, there are also plenty of catalysts moving ahead. I am excited to see new Nintendo initiatives including more theatrical releases of their IP and their (positive) effects on the rest of the company's products.
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