Nintendo Shares Surge After Outlook Hike for ‘Historic’ Switch 2

(Bloomberg) — Nintendo Co.’s stock rose by its most in six months the company raised its Switch 2 outlook, a strong signal of confidence in the marquee console’s momentum ahead of the critical holiday season.

Most Read from Bloomberg

The Kyoto-based games pioneer now expects to sell 19 million units of the gadget by March next year, up from the original guidance of 15 million units. It also lifted its fiscal-year operating income forecast by 16% to ¥370 billion ($2.4 billion) after reporting results that beat expectations.

Nintendo’s move helps fuel investor expectations for a device regarded as a watershed moment for the industry, steering game development and business decisions by partners and competitors in coming years. Its shares in Tokyo jumped as much as 10.2% on Wednesday, shrugging off a global market pullback on technology stock valuations.

The Switch’s “momentum remains historic,” Jefferies analysts Atul Goyal and Shunki Nakamura wrote in a report. “Nintendo’s ability to ramp supply and maintain high sell-through rates, despite global demand, highlights operational excellence.”

The sustained strength of one of this year’s biggest consumer electronics debuts bodes well for holiday shopping demand. Nintendo reported operating profit of ¥88.25 billion and revenue of ¥527.2 billion in the three months through September, selling 10.36 million Switch 2s between the June launch date and the end of the quarter.

“Selling over 10 million units in just the first half of the fiscal year was a major surprise,” Toyo Securities analyst Hideki Yasuda said. “Since sales in the second half of the year — which includes the Christmas shopping season — almost never fall below those of the first half, there is a strong likelihood that Nintendo will revise upward again.”

The Switch 2 is Nintendo’s most expensive piece of hardware to date, and the company’s sole long-term platform for a wealth of in-house gaming franchises. It surpassed sky-high expectations for early sales, setting records for the console segment and powering hardware across Nintendo’s two key markets of Japan and the US.

Nintendo President Shuntaro Furukawa has said it won’t be easy to keep up that hot momentum, pointing to the hardware’s elevated price and macroeconomic challenges including US-China trade uncertainty and the Donald Trump administration’s elevated tariffs. Nintendo spent 64.6 billion yen on advertising in the most recent quarter, an 80% increase to ensure the Switch 2 was ever-present in the minds of fans and potential new customers.