The Nintendo Switch Era Comes to a Close: What's Next for the Gaming Giant?

Nintendo is at a pivotal moment in its history, releasing the highly anticipated Legend of Zelda: Tears of the Kingdom while the Super Mario Bros movie surpasses $1 billion at the box office, becoming the most successful video game adaptation and the fifth highest-grossing animated film. The company's theme park ambitions are also taking off, with Super Nintendo World expanding to Universal Studios parks in Florida and Singapore by 2025. Pokémon Go remains one of the top-grossing mobile games, and the Switch has sold over 125 million units worldwide, solidifying Nintendo's golden age. However, the Switch is nearing the end of its lifespan, with Nintendo projecting 15 million unit sales by March 2024, a decline from the previous year. The console has reached its addressable audience, and even if it meets its targets, it will be a decline from the previous year. The Switch has sold so many units that it has conquered its market, setting Nintendo up for its next act from a position of strength. Its IP library is stronger than ever, and the company has executed well in software and licensing partnerships. The problem now is what comes next. Tears of the Kingdom feels like a swansong for the Switch, but there is no clarity on what follows. Nintendo had considered a souped-up Switch Pro, but the pandemic delayed the new Zelda game and likely canceled new hardware launches. If Nintendo still wanted to pursue this plan, it could have done so by now, but the Switch needs a successor, not just an upgrade. The company may have new hardware to announce later this year, avoiding mention of it to avoid undermining Tears of the Kingdom's launch. However, the odds of this hardware being a straightforward Switch Pro are decreasing. Nintendo has always innovated with hardware updates, and a straightforward update to the Switch may not be enough. The company's success creates a high-pressure environment to try something new, but also pressure to play it safe. Doing something innovative while maintaining backwards compatibility has worked best for Nintendo in the past. A fresh concept, not just a new chipset, will appeal to Nintendo's decision-makers, and it would explain why there is no new hardware on the horizon. The form of this concept is unknown, but it is unlikely to be a simple spec bump. Nobody should be surprised if Switch 2.0 turns out to be something entirely new and different.