By Sarah E. Needleman
Nintendo Co. says it will start selling a cheaper version of its Switch videogame console in September, a move aimed at boosting sales for a system that is now more than two years old.
The Switch is a critical product for Nintendo, contributing more than 85% of total sales when including software sales and an online subscription service. Since the Switch's release in March 2017, Nintendo said it has sold 34.7 million of the devices through March 31 this year.
Analysts expect Nintendo to sell another 17.5 million units in the year ending in March 2020, according to market-research firm Visible Alpha.
The new model, called Nintendo Switch Lite, is smaller than its predecessor and doesn't connect to a TV screen. It will be priced around $200, about $100 less than the flagship model, and could serve as a replacement to the 3DS, Nintendo's aging hand-held device. The Wall Street Journal reported earlier this year that Nintendo planned to release new versions of the Switch.
Switch sales missed analysts' expectations in Nintendo's most recent fiscal year, though the company said it expected a better performance this year. Nintendo sold 16.95 million units of the Switch for the year ended in March, compared with the 18 million units analysts had expected.
Some industry observers expected Nintendo to unveil the new models last month at the E3 videogame expo in Los Angeles. But the company instead focused on new software.
Makers of videogame hardware typically release new consoles every five to six years, though they often update the devices in the middle of their life cycles to reinvigorate sales. Sony Corp. introduced the PlayStation 4 in November 2013 and updated it with a less-expensive version in September 2016 and a costlier, high-end model shortly after. To date, Sony says it has sold more than 94 million units of PlayStation 4 system.
Nintendo also plans to launch an enhanced version of the Switch, people familiar with the matter told the Journal. The other new model won't be as powerful as Sony's PlayStation 4 Pro or Microsoft Corp.'s Xbox One X, according to parts suppliers and software developers for Nintendo who had access to a prototype of the machine. No plans were disclosed Wednesday for that device.
Nintendo last month began shifting some production of the Switch to Southeast Asia from China to limit the impact of possible U.S. tariffs on Chinese-made electronics, according to people who work on Nintendo's supply chain. The Kyoto, Japan-based company has previously relied on Chinese factories to manufacture its videogame hardware.
The announcement of the new Switch comes a day after Nintendo launched "Dr. Mario World," a game for smartphones and tablets. It quickly shot to the top of Apple Inc.'s U.S. app store download chart.
Nintendo moved into the mobile gaming market in March 2016 with the release of the social game "Miitomo" and closed it in January due to low interest. The company has since fared better with mobile games including "Super Mario Run," "Fire Emblem" and "Animal Crossing: Pocket Camp."
Corrections & Amplifications Nintendo moved into the mobile gaming market in March 2016 with the release of the social game "Miitomo." An earlier version of this article misspelled the name of the game as "Mitomo." (July 10, 2019)
Write to Sarah E. Needleman at firstname.lastname@example.org