Nintendo’s stock soared 5.8% in Tokyo on Wednesday following the company’s announcement that games from its current Nintendo Switch console will be compatible with its upcoming successor, according to a report from CNBC. This decision is expected to boost interest in the new device among the current Switch user base, a move aimed at strengthening engagement as Nintendo prepares for the highly-anticipated console release.
Analysts and investors view this backward compatibility as a positive indicator for the company’s strategic direction. “Investors think this is a sign Nintendo’s next device will not be a risky experiment but rather a continuation,” said Serkan Toto, CEO of Tokyo-based Kantan Games.
He suggested Nintendo might be adopting a strategy similar to Apple’s approach with the iPhone—focusing on iterative improvements rather than drastic innovation with each generation.
“I believe investors want Nintendo to adopt the iPhone approach of gradually improving a winning product instead of trying to reinvent the wheel with every new console generation,” Toto told CNBC.
Backward compatibility offers key advantages for console makers, especially at launch when the number of new games may be limited. This feature will allow players immediate access to a wide selection of games, enhancing the appeal of the new console.
Additionally, it alleviates concerns for current Switch users who may want to purchase games now without worrying about future compatibility. Nintendo’s commitment to supporting current titles on the successor console aims to sustain interest and prevent delays in game purchases as fans await the new device.