Nintendo's new, less expensive Switch is a brilliant move that is likely to sell millions of consoles this holiday - and the company's stock is already jumping on the news
Why is the Nintendo Switch Lite such a big deal? Because Nintendo's handheld consoles are actually the company's biggest sellers, and the Switch Lite is an incredible replacement for the sunsetting Nintendo 3DS line.
Nintendo's stock price jumped on the news of the new, less expensive, handheld version of the Switch — and it's easy to understand why.
Nintendo announced the Switch Lite on Wednesday, July 10 at 8 a.m. ET, and by mid-morning Nintendo's stock had already jumped from $47 per share to over $48 — it's currently trading near its 52-week high of $48.68 per share.
The market's response to Nintendo's announcement is logical.
"We think the handheld-only version (called Switch Lite) has the potential to sell far more units than the 11.5 million we have modeled for FY:21.," the note this week from Wedbush says.
A note from Jefferies on Nintendo this week reflected a similar sentiment: "Switch has cumulative sales of 35 million so far and has yet to target 3DS owners who are price sensitive. We have no doubt that this option will boost demand for both hardware and high-margin software."
Both firms are recommending Nintendo stock as a buy, and are expecting a spike in Nintendo Switch sales this holiday as a result of the new console.
Something all the analysts are missing: A new, main series "Pokémon" game launches this November, and it's going to make the handheld Switch even more appealing during the holiday shopping season.
A huge part of Nintendo's handheld gaming history is directly tied to the "Pokémon" gaming franchise, which first launched way back on the original Game Boy.
On November 15, the next major entry in the long-running "Pokémon" game series arrives on the Nintendo Switch: "Pokémon Sword & Shield." And it's going to be a really big deal.
Aside from the fact that the game's main selling point is gigantic Pokémon (so-called "Dynamax" creatures), it's a certainty that "Pokémon Sword & Shield" will make a massive sales splash.
Look no further than the previous "Pokémon" games for evidence of that:
Between the last two major "Pokémon" games for the Nintendo 3DS, over 30 million copies were sold. Those are absolutely ridiculous numbers — each game sells as many copies as Nintendo's flagship "Super Mario" and "Legend of Zelda" franchises.
The Switch Lite is just $200, and "Pokémon" games are traditionally made for Nintendo handheld consoles. And by the way, yes, Nintendo is, of course, releasing a Pokémon-themed version of the Switch Lite in November (seen above).
Frankly speaking, it's likely the new "Pokémon" game will convince a lot of people to buy a Nintendo Switch this holiday.
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