Expect more variations of the Switch as Nintendo continues to refine its home and portable business strategy.
That's the message from Citigroup, which says the new console is doing well, but is too big to truly combine home and portable gaming for everyone. That's why they expect the Kyoto-based company to release a smaller version of the Switch in the fiscal year through March 2019, according to analysts including Minami Munakata, Kota Ezawa and Alicia Yap.
"Although the Nintendo Switch can be used as a handheld device, we think smaller children could struggle to use it comfortably in that format due to its size and weight," the analysts wrote in a April 13 report. "Accordingly, we think Nintendo will launch a lighter, dedicated handheld version of the Switch, possibly to be called the Switch Mini."
For decades, Nintendo has made billions by having gamers buy two distinct sets of hardware: one to play at home like the Wii, and another such as the 3DS when on the go. Nintendo's move to combine the two playing styles into a single hybrid design has been praised by fans, but has also resulted in a machine that isn't as powerful as other home consoles like Sony Corp.'s PlayStation 4, while also being heavier and with a shorter battery life than the 3DS.
Nintendo shares rose 2.1 percent in Tokyo on Friday after the company said Switch sold faster in its first month than any other of its video-game systems, with more than 906,000 Switch consoles shipping last month in the US, according to data from industry researcher NPD Group.
The Citigroup analysts didn't predict how much the smaller Switch could cost, but estimated it could sell 6.7 million units in the 12 months through March 2019. They also expect the regular Switch to sell 25.7 million units by then. In the report, Citigroup initiated coverage of the game maker with a buy rating targeting JPY 35,000 per share, 36 percent more than Nintendo's closing price on Friday.
© 2017 Bloomberg L.P.