Nintendo Co.’s newest console, the Switch 2, is set to launch sometime in 2025. It’s the first major hardware release in more than eight years for the company that has become synonymous with video games. And Nintendo’s overall fate could hinge on whether the device is a hit, Bloomberg News has reported. With more than 150 million units sold since its launch in 2017, the original Switch is set to become Nintendo’s best-selling device. The hybrid machine, which can be played on a TV at home or as a handheld, has generated about $100 billion in sales and sent Nintendo’s stock to a record high.

The Switch has been so successful in part because it replaced two existing devices: the Wii line of home consoles and the DS line of handhelds. But the merger also created a concentration risk. Because if the Switch 2 falters, there’s no other console to fall back on. And now the maker of the Mario series must do something it has rarely done before: follow up one console hit with another.

There’s little room to get it wrong. Nintendo is heavily reliant on the success of this device. Sony Group Corp., the maker of the PlayStation, is a diversified conglomerate that makes semiconductors, offers insurance and licenses music. For Microsoft Corp., Xbox hardware is little more than a rounding error compared to its cloud business and software. Other tech companies like Apple Inc. release products much more frequently, often once a year.

Mario Kart 8 Deluxe

The company built its brand on a philosophy of thinking differently. The company’s late president, Satoru Iwata, once advocated a strategy of surprising gamers rather than relying on updating existing hardware with flashier graphics and faster loading times before the Switch launched. But that desire to do things differently has also sometimes led the company into a dead end. It stuck to smaller-capacity discs on the GameCube instead of DVDs, and gave the 3DS an innovative but quirky glasses-free 3D screen. For gamers, that’s always been part of Nintendo’s charm.

The fact that the company often flatly refuses to do anything smart but boring has given us innovations that have changed the industry forever. When industry watchers agreed that dedicated hardware was dying and Nintendo should move to mobile, the company took the opposite approach, putting all its eggs in the Switch basket. But for shareholders, that strategy has sometimes been a bit of a wild ride. Ahead of its full reveal on April 2, little has been revealed about the Switch 2 beyond its name and familiar form factor that bears a striking resemblance to the original machine. With no hardware innovation or new ways to play, like motion controls, is putting a “2” at the end enough for the next Switch? Can it balance a familiar product offering with gamers’ desire for new experiences?

To continue to grow sales and profits, Nintendo simply needs to make the device a hit. Despite its forays into theme parks, movies, and mobile games, the company still relies on its gaming devices for nearly all of its revenue. With more than 70 percent of the games sold on the Switch being created by Nintendo itself, a successful device could generate record profits. The company has a moat in the gaming industry that few can replicate. It also rarely drops its software. All of this feeds into a feedback loop in which a hit console becomes a license to print money. In fiscal 2024 alone, Nintendo sold more than 8 million units of Mario Kart 8 Deluxe, a game that first launched more than a decade ago for the Wii U.

Nintendo Music

If you count the Switch, the company has sold more than 75 million units to date — and the game still sells for its full price of $60. Moving to new hardware is the riskiest time for a console maker. While a device like Apple’s iPhone has a staggered annual release cycle with support spanning multiple generations, requiring players to upgrade every few years, each new Nintendo machine resets its user base to zero.

With the Switch 2, the company must find a way out of the boom-and-bust cycle and build a loyal following. With services like Nintendo Music, a streaming app that plays soundtracks from its catalog of games, the company is already expanding its subscription offerings to keep users in its world. Now it must convince those subscribers and the millions of existing Switch users to buy the new machine, encouraging a younger generation to play for the first time. A strong library of games will be essential to avoid repeating a past mistake: its long history of failing to follow one stricken device with another.