Nintendo's Switch is flying off the shelves, and two new games for the console are evidence of the Switch's popularity.
But according to Atul Goyal, an analyst at Jefferies, two new games in particular point to the growing popularity of Nintendo's newest console.
"Two major surprises: Last week, Rockstar (creator of GTA) announced L.A. Noire for Switch. This week Tencent announced its mobile game ‘Arena of Valor’ (aka Honor of Kings) for Switch – a Free2Play model," Goyal said.
The two games each mean something different for the Switch, so let's break it down.
"It was a surprise when Take Two studio Rockstar (creator of GTA and Red Dead Redemption) announced L.A. Noire game for Switch (in addition to launch on PS4 and XBO). This is a sign that Nintendo platform is expected to be big and attractive enough for third party developers to dedicate resources towards game development for Switch," according to Goyal.
Rockstar is a powerhouse game developer, and coming to the Switch is a huge deal for the platform, Goyal said. He expected support for the new console to be strong, but L.A. Noire is evidence of this happening faster than Goyal predicted. Strong sales of the Switch have made it a force to be reckoned with, and its large fan base has proven enough incentive for major studios to start paying attention to the platform.
"There are many more games being made available on Switch than Nintendo’s previous platform," Goyal said.
Tencent is a Chinese company that, until now, has produced PC and mobile games, ignoring the popular consoles. Arena of Valor is a port of the company's popular mobile game by the same name, but it is another example of the strength of Nintendo's Switch.
"It could also mean that the two companies[, Nintendo and Tencent,] are in discussions to bring their respective games to each other's platforms. That would suggest that Nintendo mobile games could come to China via Tencent platform," Goyal said.
If Goyal is right, Nintendo's nascent mobile strategy could get a boost from Tencent's mobile prowess, especially in China. Tencent would gain access to its first console and Nintendo's loyal fans through a partnership.
The Switch, despite supply constraints, has been the best-selling console globally, according to estimates made by Goyal. The strong sales have put Nintendo into the spotlight for many developers, and bigger titles will only increase the already rabid demand for the console.
Goyal rates Nintendo a buy, and the company is up 56.25% this year.