Core Viewpoint - Nintendo's release of the "Nintendo Switch 2" on June 5 features a specially developed AI chip by Nvidia, which is expected to address the challenges faced by previous successor models of Nintendo's gaming consoles [2][5]. Group 1: Product Features and Technology - The new Switch 2 utilizes Nvidia's advanced AI chip, which is described as a "technological miracle" and is capable of running complex games [2][5]. - The chip supports Nvidia's proprietary technology "DLSS" (Deep Learning Super Sampling), allowing for smoother operation of graphically demanding software [6]. - The Switch 2 can run popular games such as "Street Fighter 6" and "Elden Ring," which were not available on previous models, indicating a significant enhancement in gaming capabilities [6]. Group 2: Historical Context and Challenges - Nintendo has struggled with the successor models of its popular consoles like the DS and Wii, with past models failing to surpass the sales of their predecessors [7][9]. - The 3DS sold 75.94 million units, only about half of the DS's sales, while the Wii U sold 13.56 million units, just one-seventh of the Wii's sales [9]. - The failures of previous models were attributed to an inability to fully leverage new features and complexities that deterred software developers [9]. Group 3: Market Position and Future Strategy - Nvidia's market capitalization is approximately $3.5 trillion, significantly higher than Nintendo's $150 billion, highlighting the importance of Nintendo as a client for Nvidia [5]. - Nintendo's revenue model heavily relies on its proprietary software, which accounted for 73% of sales in the 2024 fiscal year, down 8.2 percentage points from the previous year [10]. - The company aims to diversify its revenue streams by attracting third-party developers to create software for the Switch 2, which is seen as crucial for mitigating risks associated with reliance on its own software [10].

Core Viewpoint - The release of "Nintendo Switch 2" on June 5, featuring a specialized AI chip developed by NVIDIA, aims to overcome the challenges faced by previous successor models of Nintendo's gaming consoles [1][5]. Group 1: Product Features and Technology - The new Switch 2 utilizes NVIDIA's advanced AI chip, which is described as a "technological miracle," enabling it to run complex games [1][3]. - The chip supports NVIDIA's proprietary technology "DLSS" (Deep Learning Super Sampling), allowing high-demand software to run smoothly on the device [4]. - Switch 2 can now support popular games like "Street Fighter 6" and "Elden Ring," which were not available on previous models, indicating a significant enhancement in gaming capabilities [4]. Group 2: Historical Context and Challenges - Nintendo has struggled with the successor models of its popular consoles, such as the DS and Wii, which failed to achieve sales comparable to their predecessors [5]. - The 3DS sold 75.94 million units, only about half of the DS's sales, while the Wii U sold 13.56 million units, just one-seventh of the Wii's sales [5]. - Previous models like the Wii U and 3DS faced issues due to underutilization of new features and lack of differentiation from earlier models, leading to significant financial losses for Nintendo [5]. Group 3: Market and Strategic Implications - The relationship between Nintendo and NVIDIA is long-standing, with Nintendo being a crucial customer for NVIDIA's GPU manufacturing [3]. - The performance expectations for Switch 2 are high, with software developers expressing enthusiasm for creating games for the new platform [6]. - Nintendo's revenue model heavily relies on its proprietary software, which accounted for 73% of sales in the 2024 fiscal year, indicating a need to diversify and reduce reliance on its own titles [7].

Core Viewpoint - Nintendo has confirmed that it will not adopt the "keycard" model for its first-party games on the upcoming Switch 2, maintaining traditional physical game cartridges to ensure players can experience games without additional downloads [1][3]. Group 1: Nintendo's Strategy - Nintendo's official response indicates a commitment to traditional physical game cartridges for first-party titles, ensuring a seamless gaming experience for players [1][3]. - Doug Bowser, President of Nintendo of America, emphasized that physical game cartridges remain a crucial part of the company's business model [4]. - The upcoming Switch 2 games, such as "The Legend of Zelda: Breath of the Wild" and "The Legend of Zelda: Tears of the Kingdom," will integrate original games with upgrade packs on a single dedicated cartridge, eliminating the need for download codes [4]. Group 2: Third-Party Game Distribution - Third-party developers may adopt different distribution methods, with some games like "Street Fighter 6" using the keycard model, while others like "Cyberpunk 2077: Ultimate Edition" will continue to use traditional full-data cartridges [4][5]. - Nintendo has reportedly provided third-party developers with three distribution formats: pure digital, 64GB capacity physical cartridges, and keycards, with the higher cost of 64GB cartridges leading some smaller developers to opt for keycards [4]. Group 3: Game Ecosystem Clarity - Several confirmed first-party Switch 2 upgrade games will utilize the integrated cartridge format, contributing to a clearer gaming ecosystem as more details emerge [5].

Core Viewpoint - Nintendo is set to release its new gaming console, "Nintendo Switch 2," on June 5, 2024, marking the first new console launch since the original Switch in March 2017. The new console features improved graphics, faster data reading speeds, and a new remote chat function, with a base price of 49,980 yen (approximately 2,455 yuan) for the Japanese version [1][3]. Group 1 - The Switch 2 features a 7.9-inch LCD display, larger than the standard 6.2-inch model of the original Switch, and supports HDR for better visual performance [3]. - The price of Switch 2 is lower than Sony's PlayStation 5 (79,980 yen, approximately 3,930 yuan) but is an increase of about 17,000 yen compared to the original Switch (32,978 yen, approximately 1,620 yuan), attributed to rising costs of semiconductor components and logistics [3]. - A multilingual version of the Switch 2 is expected to retail for 69,980 yen (approximately 3,435 yuan) [3]. Group 2 - Nintendo plans to launch dedicated software alongside the Switch 2, including "Mario Kart: World," with additional titles like "Donkey Kong" and "Kirby" to follow. Capcom will also port "Street Fighter 6" to the new console [4]. - As of the end of 2024, the cumulative sales of the original Switch are projected to exceed 150 million units. Nintendo's consolidated operating revenue has grown from 504.4 billion yen in FY2015 to 1.6718 trillion yen in FY2023, more than tripling in eight years [5]. - However, the operating revenue for FY2024 is expected to decline to 1.19 trillion yen, a 29% decrease from the previous fiscal year, indicating potential challenges ahead for Nintendo's growth trajectory, heavily reliant on the sales performance of the Switch 2 [5].