Nintendo’s High-Stakes Power-Up: The Switch 2, and Why It Has to Win

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Nintendo’s High-Stakes Power-Up: The Switch 2, and Why It Has to Win

“Let’s-a go!”—if that phrase sparks joy, chances are you’re among the hundreds of millions who’ve grown up with Nintendo. Whether you first picked up a controller in the era of pixelated plumbers or danced your way through the Wii craze, Nintendo likely played a part in your gaming story.

Now, with the launch of the Switch 2, Nintendo is hoping that story continues. But this isn’t just another console launch. It’s a pivotal moment for the Japanese gaming giant—arguably the most critical product rollout in its modern history.

Let’s unpack why this time, Nintendo simply can’t afford to miss.

Back in 2017, Nintendo unveiled the original Switch—part console, part handheld, and a full-on hit. In an industry where the trend had been to push for higher specs, sleeker graphics, and immersive realism, Nintendo zagged where others zigged. The Switch was about flexibility, fun, and universal appeal.

That gamble paid off. Over the next eight years, Nintendo sold over 150 million units, bringing in $100 billion in revenue and solidifying its place among the best-selling consoles of all time. It was a comeback for the ages—especially after the misfire that was the Wii U.

The Switch wasn’t just a gaming device. It was a lifeline.

Why the Switch 2 Carries Higher Stakes

For a company like Sony, the PlayStation is just one part of a sprawling hardware and entertainment empire. Microsoft can cushion Xbox missteps with its cloud business and enterprise software. Nintendo, on the other hand, is all in on gaming.

That’s not hyperbole. In a typical year, 93% to 95% of Nintendo’s revenue comes from its gaming division. Hardware, games, merchandise, and increasingly, media extensions like theme parks and movies—it’s all anchored in their console ecosystem. That makes the Switch 2 a must-win.

Their risk is heightened by their strategic choice this time around. Unlike the original Switch, which was a radical hybrid of TV console and portable gaming device, the Switch 2 is a refinement, not a reinvention. It has a sharper display, magnetic controllers, and a slate of new first-party titles like Mario Kart World. But it’s still, recognizably, a Switch.

That’s a major departure for Nintendo, which has traditionally bet big on surprise and novelty. From the motion-sensitive Wii to the 3D-capable 3DS, each generation was a bold swing. This time, they’re playing it safe.

And that may be smart.

Learning from the Wii U

Nintendo has seen what happens when the message doesn’t land. The Wii U, launched in 2012, was an ambiguous, confusing step up from the Wii. Many consumers weren’t even sure if it was a new console or just a peripheral. It sold poorly, tanked Nintendo’s stock, and triggered three straight years of operating losses.

The company’s lesson? Clarity matters.

With the Switch 2, they’re leaning into brand familiarity. It looks like a Switch. It feels like a Switch. It is a Switch—but better. That recognition might prevent another Wii U-style flop.

But Not Everyone’s Cheering

For all its buzz, the Switch 2 hasn’t landed without criticism. Priced at $449, it sits at the top end of what analysts expected. But the real sticker shock is in the games: Donkey Kong Bonanza will retail at $70, while Mario Kart World hits $80—a 30% price hike that’s irked even loyal fans.

To make matters more complicated, U.S. tariffs on goods from China and Vietnam—where Nintendo assembles most of its hardware—could further strain margins or push prices even higher. Analysts worry that with the U.S. being Nintendo’s largest market, even modest trade disruptions could have outsized effects.

And in a cost-sensitive consumer market, especially amid rising inflation and increased entertainment competition, pricing will matter.

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Nintendo’s Real Advantage: Its IP

Still, what makes Nintendo bulletproof isn’t just its hardware. It’s the characters. The company has spent decades cultivating some of the most beloved IP in entertainment—Mario, Zelda, Donkey Kong, Animal Crossing, Smash Bros.

In 2024, Mario Kart 8 Deluxe—a game that originally launched over a decade ago—still sold 8 million copies. That’s not just nostalgia; that’s franchise power.

This brand loyalty is hard, if not impossible, for competitors to replicate. Microsoft and Sony have deep game catalogs, but they don’t have Mario. And that emotional connection is what turns $70 games into impulse buys.

A New Strategy, A New Era?

Nintendo’s conservative approach with the Switch 2 suggests something else: a strategic pivot.

Rather than chasing the cutting edge, they’re doubling down on platform continuity, IP leverage, and ecosystem stickiness. It's Apple’s iPhone model applied to consoles—same shape, new guts, better software.

They’re also branching out. In recent years, Nintendo has expanded into theme parks (Universal Studios), movies (The Super Mario Bros. Movie grossed over $1.3B), and direct-to-consumer retail. But none of that works if the core device flounders.

The Switch 2 isn’t just a new gadget—it’s the anchor for Nintendo’s entire media flywheel.

Can Competitors Catch Up?

Rumors swirl that Sony and Microsoft are exploring their own hybrid or portable devices. But even if they match Nintendo’s form factor, replicating its magic will be harder.

As one analyst put it, Nintendo’s moat isn’t the hardware—it’s the characters, the nostalgia, the multi-generational loyalty. You can’t reverse-engineer Mario.

And that’s why, despite price hikes, despite tariffs, despite having no real plan B—Nintendo fans are still lining up.

The Bottom Line

The Switch 2 is shaping up to be the most important product Nintendo has released in over a decade. It's a carefully calculated bet: preserve what worked, avoid past missteps, and lean into the power of brand and community.

For investors, it’s a litmus test of whether Nintendo can maintain dominance in a maturing, crowded gaming market. For fans, it’s a chance to reconnect with the world’s most iconic gaming universe.

And for Nintendo? It’s game on.

Interested in learning more about gaming? Check out our previous coverage here:

• Why India's gaming industry is the Next Big Bet for VCs

• Has Mobile Premier League (MPL) lost its mojo?

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Peeyush and Mohit

Disclaimer: The views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author's employer, organization, committee or other group or individual.