Smaller, cheaper Nintendo Switch might surface in June

An attendee plays a video game next to the Nintendo booth at the E3 2017 Electronic Entertainment Expo in Los Angeles, California, U.S. June 13, 2017.

Despite the strong numbers, Nintendo delivered below analysts estimates, Bloomberg reports.

Nintendo sold about 2.5 million Switch systems in the fourth quarter ending in March, bringing the total of the systems sold for the fiscal year to just under 17 million units, the company reported Thursday.

Glancing at Nintendo's digital business, the company said sales from download versions of retail software and download-only titles on Switch "showed particularly good growth", and that overall digital sales revenue rose by 95.4 percent year-on-year to 118.8 billion yen ($1.1 billion). But Nintendo had expected to sell 20 million units.

A March report from the Wall Street Journal indicated that Nintendo is working on two new versions of the Switch hardware: one cheaper model for more casual players, and one more expensive model for "avid" fans. Last year, it sold 17 million units, below the 17.5 million that were estimated. Instead Nintendo will provide smaller upgrades to the existing Switch model.

The industry is facing a shake-up with established console gaming companies like Nintendo and Sony Corp exposed to competition from new entrants like Alphabet Inc's Google offering browser-based games streaming services. With the 3DS seemingly nearing the end of its life span, the Switch could replace it altogether. Its share price has risen 32 percent year-to-date, pushing its market capitalization above 5 trillion yen.