Nintendo to Update Switch -- WSJ

Screen improvements to videogame console are among changes debated for next year

By Takashi Mochizuki 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 5, 2018).

TOKYO -- Nintendo Co. plans to release a new version of its Switch videogame console next year to maintain the sales momentum of the device, according to suppliers and others with direct knowledge of the plan.

Sales of the Switch, introduced in March 2017, are still solid but are no longer delivering the favorable surprises that marked the machine's first year on the market. Nintendo shares, which rose sharply last year, have trailed the broader stock market this year. The move to update the Switch suggests the Kyoto, Japan, company is moving quickly to ensure its flagship product doesn't lose competitiveness.

Nintendo is still debating what new hardware and software features to include in the upgrade and weighing the cost of the features, people with knowledge of the discussions said.

One option is improving the display, they said. The current Switch uses a lower-end liquid-crystal display without some technologies that are standard in more recent smartphone LCDs.

Updating the display with these technologies would make it brighter, thinner and more energy-efficient. The updated Switch isn't expected to adopt the organic light-emitting diode or OLED panels used in Apple Inc.'s iPhone X series.

Nintendo is looking to release the new Switch in the latter half of 2019, perhaps as soon as summer, the people said.

A Nintendo spokesman declined to comment.

Between its introduction last year and June 30 of this year, Nintendo sold 19.7 million units of the Switch, a pace that compares favorably with Sony Corp.'s PlayStation 4, the most popular console among the current generation of videogame players. The Switch can be used both as a living-room console and as a portable game machine.

Nintendo has said it wants to sell 20 million units in the year through March 2019, and analysts say they expect sales roughly to match that goal assuming some popular software titles planned for late this year arrive on schedule. Nintendo has said it plans to introduce "Super Smash Bros. Ultimate" on Dec. 7.

Videogame makers generally come out with new consoles every five to six years, and it is common for them to update the devices in the middle of their life cycles to keep the momentum going. Sony introduced the PlayStation 4 in November 2013 and updated it with a less-expensive version in September 2016 and a high-end model two months later.

A new Switch would follow that pattern. Nintendo's Shigeru Miyamoto, who created many of its top games and now holds the title of creative fellow, said in February he wanted the Switch's life cycle to be longer than usual, suggesting next year's update of the hardware may not be the last.

The upgraded Switch would likely share many features with the current version and be compatible with existing Switch game software.

Software makers and others in the industry are watching whether Nintendo will clarify the future of its hand-held 3DS videogame device when it decides on the next Switch.

Nintendo has said it would keep selling 3DS machines because they are a safe and affordable option for children. But new game releases for the platform have been declining and some popular franchises, including Nintendo's own "Pokémon," moved to the Switch this year.

An executive at one software maker said the 3DS was increasingly overshadowed by smartphones that are well-suited to portable games. He said he was waiting for a "clear message" from Nintendo about what it would do with the 3DS series when it puts out a new Switch.

--Yang Jie in Beijing contributed to this article.

Write to Takashi Mochizuki at [e-mail]

(END) Dow Jones Newswires

October 05, 2018 02:47 ET (06:47 GMT)

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