Can the Switch 2 Break Nintendo's Historical Sequel Curse?

The highly anticipated launch of the Switch 2 has generated significant buzz, reminiscent of the most successful console launches of the past. Following the subdued releases of the PS5 and Xbox Series X/S during the pandemic, this high-profile launch is a much-needed boost to the industry. However, like the PS5, the Switch 2 is likely to face supply constraints, with demand expected to outstrip supply for several months. To mitigate this, Nintendo has implemented measures such as requiring an active account history for pre-orders, but the effectiveness of these efforts remains to be seen. The challenge of matching supply to demand is complex, and forecasting demand for a console is inherently tricky. Increasing supply often requires significant investments in production lines or entire factories, which is costly and risky. As a result, companies tend to err on the side of caution and risk supply constraints rather than over-supply. Nintendo's target of selling 15 million Switch 2 units in the first year is a solid goal, but it may be conservative considering the device's potential demand. The original Switch has sold over 150 million units, making it one of the most successful gaming devices in history, and its popularity ensures a strong foundation for the Switch 2. The new console's upgrade appeal is heightened by its improved performance and the ease of upgrading and passing down the original Switch to others. This could lead to significant supply constraints, especially as new titles are announced and the software library expands. Despite the risks, the Switch 2 is well-positioned to break Nintendo's curse of underperforming sequels by building upon the successful formula of its predecessor. The strong early response to the console and the prospect of a sizable installed base by the end of the year make the Switch 2 an attractive opportunity for developers and publishers. It will be interesting to see if the system can replicate the success of its predecessor in supporting smaller and independent titles in its early years.