On Wednesday, Shuntaro Furukawa, President of Nintendo, announced that the upcoming successor to the Nintendo Switch will allow players to continue enjoying their current library of Switch games. This backward compatibility is a strategic move to ensure a smooth transition for users to the new console, which is set to be unveiled before the fiscal year ending in March 2025.

Furukawa emphasized the importance of maintaining continuity for the Nintendo community during a management policy briefing. “Many of our customers are actively engaged with the Nintendo Switch, and we want to enhance their gaming experience on the new device by allowing them to play their existing games,” he explained. This approach not only aids in transitioning but also preserves the value of the extensive library of Switch games already on the market.

The introduction of a compatible successor console is expected to encourage existing users to upgrade while retaining their interest in both new and existing software titles. According to Serkan Toto, founder of Kantan Games consultancy, “While it’s not entirely unexpected, this move suggests that the new device will bear similarities to the current Switch, facilitating a seamless user experience.”

The Switch has been a powerhouse in the gaming market, with Nintendo selling over 1.3 billion software units and the console reaching more than 145 million households worldwide. Despite its eight-year tenure, the Switch continues to draw consumers with its robust lineup of games and periodic hardware refreshes.

However, Nintendo has recently adjusted its hardware sales projections downward by 7% to 12.5 million units for the fiscal year, signaling a potential saturation in its primary markets. This was noted by Jefferies analyst Atul Goyal, who wasn’t surprised by the hardware forecast miss. On the flip side, software sales have shown promising growth, with a 29% increase to 39.6 million units in the second quarter ending September—a trend that is expected to persist into the third quarter.

Following the announcement, Nintendo’s shares saw a significant uptick, rising 6% on the Tokyo Stock Exchange, outperforming the 3% gain of the benchmark index. This positive investor reaction underscores confidence in Nintendo’s strategic planning and ongoing appeal to gamers worldwide.