Switch 2 will see Nintendo’s share of the console hardware market grow to almost 50% by 2027

Nintendo’s Switch successor, the Switch 2 has launched today (05 June 2025), and 13m gamers are expected to pick up the console by the end of the year. A decline in Switch, PlayStation 4, Xbox One, PlayStation 5 and Xbox Series spending in 2025 counters the positive impact of the Switch 2 launch on the overall market. 2026 will see boost from Grand Theft Auto VI before next-gen PlayStation and Xbox consoles launch at end of 2027.

Initial sales of the Switch 2 are expected to be slightly ahead of the original Switch due to pent up demand from existing Switch users. Longer-term, the cumulative sales volume is predicted to reach 104m by 2030, a slower rate of sales compared to the original Nintendo Switch (120m at a similar time frame), which benefitted from the pandemic-driven surge in hardware sales. Despite this, Nintendo’s hardware active installed base market share will increase to nearly 50% by 2027, as the industry waits for Sony and Microsoft to transition to a new generation of consoles. 

By the end of 2026 there should be a reinvigorated active user base of almost 130m across the original Switch family and Switch 2 - meaning that backwards compatibility and the ability to cross-gen publish represents a significant opportunity. The combined 130m+ active consoles should last 2-3 years, peaking in 2028.

Improved online functionalities allow the Switch 2 to take on competitors more effectively

The Switch 2 has introduced GameChat, a chat feature that will bring the device’s social capabilities more in line with other competitors in the console space. By improving chat capabilities, Nintendo prevents users from seeking these experiences elsewhere: 28% of churned Nintendo Switch Online subscribers in Ampere’s consumer survey stated that they unsubscribed as their friends were on other services (N=40,280, Q4 2024, 22 markets). GameChat will be free until the end of March 2026, afterwards becoming exclusive to Nintendo Switch Online. This is part of the company’s push to drive more users towards the subscription model, an opportunity that has not been fully realised within Nintendo to date.

Switch 2 represents a $7bn-8bn content opportunity over the next two years

Early adopters of the Switch 2 will spend over $2b on software in 2025, and the opportunity will reach $7bn-8bn over the next two years. Significant spending will be directed to Nintendo’s first-party games, which will be coming to the Switch 2 in one of four ways:

1. New first-party exclusives: With just two launch titles (Mario Kart World, and Nintendo Switch 2 Welcome Tour), day one releases are light for the Switch 2, but this is not unusual as the original Switch launched with just three new first-party titles (1-2-Switch, The Legend of Zelda: Breath of the Wild, and Snipperclips). Donkey Kong Bananza will release on 17 July 2025, within the console’s launch window but distinct enough to have its own time in the spotlight prior to any seasonal releases. By spacing out its first-party exclusives, Nintendo aims to maintain a consistent long-term flow of content, an essential for encouraging long-term console use.
2. Switch 2 Editions: First- and third-party editions can be purchased outright or as an upgrade for owners of the original title. With existing Switch owners driving uptake of the Switch 2, encouraging these users to spend is key to the console’s success. Nintendo Switch Online + Expansion Pack members can download select upgrade packs – including The Legend of Zelda: Breath of the Wild and The Legend of Zelda: Tears of the Kingdom – at no additional cost, adding value to the company’s subscription offering and driving recurrent spending. 
3. Free updates: Select titles, including Pokémon Scarlet/Violet, Super Mario Odyssey, and The Legend of Zelda: Echoes of Wisdom, will receive a free update to improve graphics or add support for new features such as GameShare and mouse controls. A light selection of new titles at launch means catalogue games will play an outsized role in driving overall uptake.
4. Original Switch software compatibility: Over 95% of physical and digital original Switch games will be compatible with the Switch 2. Strong cross-console support encourages existing Switch owners to fully adopt the Switch 2 as their primary device, where there are more opportunities for monetisation via first- and third-party content, as well as in-game monetisation.

Switch 2 will also keep users engaged within the Nintendo ecosystem through third-party content

The Switch 2 will play a crucial role in driving incremental sales for third-party publishers. The console’s more powerful hardware offers a new multi-platform sales channel, and additional games will keep users engaged with the Nintendo ecosystem. A cross-section of third-party special editions, ports of existing games, exclusives and multi-platform releases have been announced for Switch 2. Some of the special editions include content exclusive to the device, encouraging existing owners to pick up a second copy of the title.

Third-party support will be the main driver of spend on in-game monetisation; the biggest untapped opportunity on Nintendo platforms. In-game monetisation is expected to represent over 20% of Nintendo console software earnings by 2028, up from less than 10% in 2024. Even moderately more in-game monetisation for Switch 2 could represent $1bn-2bn additional annual spending a few years into the cycle of Nintendo's new console. While it is unlikely that Nintendo will radically change its light-touch approach to in-game monetisation, Ampere expects it to moderately increase implementation of this business model across its own first-party releases.