Japanese gaming giant is expected to launch follow-up to its wildly popular console next year.

Nintendo has announced that games for the Switch will be playable on its next gaming console.

Nintendo President Shuntaro Furukawa said on Wednesday that the company had decided it would be “optimal” to include backwards compatibility in the successor to the Switch given its enormous popularity.

“Customers will be able to enjoy the games they own and choose their next title from the lineup of games already on the market,” Furukawa told a management policy briefing.

Shares of Nintendo, which have been on the rise during the past year, rose 5.8 percent on Wednesday.

Furukawa said the company is investing in films, merchandising, amusement parks and music in addition to its core hardware and software businesses.

The Japanese gaming giant is planning to release a sequel to The Super Mario Bros Movie, which grossed more than $1.3bn at the box office worldwide, in 2026.

Nintendo’s latest update about the Switch’s replacement came a day after the company lowered its annual sales forecast by 7 percent to 12.5 million units following a 60 percent drop in net profit for the first half of the year.

Sales of the Switch, which has become one of the best-selling consoles of all time since its 2017 launch, fell 31 percent during the April-September period as gaming fans held out for news about an expected follow-up model next year.

The Switch, which is playable with a TV or in handheld mode, experienced a massive surge in popularity during the COVID-19 pandemic, helping Nintendo rack up bumper profits.