As Nintendo confirms Switch 2 backwards compatibility, analyst claims investors are more confident that the next console is "a continuation" rather than "a risky experiment"

Mario faces the camera with a thumbs up pose in Super Smash Bros. Ulimate.

Nintendo has now officially confirmed that the Switch 2 will be backwards compatible with current Switch games, and it sounds like investors are seeing this as a good sign of things to come.

This backwards compatibility announcement comes just a day after Nintendo's latest financial results, which weren't exactly positive for the company, with sales of Switch consoles (including the OLED and Lite models) down 31% year-on-year for the six-month period up to September 30. Although Nintendo justified this with a lack of "special factors" driving sales, as well as the fact that the Switch is now in its eighth year of life, analyst Dr. Serkan Toto, the CEO of Kantan Games –  a consultancy focused on Japan's games industry – said that "Nintendo stock was down around -4% in regular trading" following the results. At the time, he suggested that investors "see no fuel in the tank" until the Switch 2 reveal, but it appears that that situation has changed slightly now.