The Nintendo Switch 2 will appear on many a festive-season wish list this year. Already, strong sales of the gaming console have helped drive a strong rally in the shares of Nintendo, the company that makes it. But the stock’s near-50 per cent rally this year also reflects the Japanese group’s shrewd adaptation of a formula that has benefited iPhone maker Apple: turning continuity into a competitive advantage.
For most of gaming history, console makers followed a strict pattern. Each generation of consoles went through a hard reset, typically with a clean technological break from the last. Sony’s PlayStation 5, for example, may look similar to the PS4 but is a very different machine on the inside. Each generation of console would, traditionally, come with a new ecosystem of exclusive games.
The original Switch, launched in 2017, was a big bet for Nintendo following the commercial failure of the Wii U. The hybrid handheld and console — playable through a TV or on the go — added a new twist to portable gaming. The second iteration of the Switch, launched in June, is a different sort of big bet. Instead of leaping into a completely new format Nintendo has chosen incremental innovation. The Switch 2 looks very similar to its predecessor. It does have a sharper display based on OLED technology, a faster processor and smoother performance. But the device is still a hybrid, and games are backwards compatible.