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Nintendo Shares Drop Following Switch Concerns

Despite the largely positive response to the reveal of the Nintendo Switch, the Japanese gaming company’s new console, shares in Nintendo have slumped after the market expressed concerns that the short video of the new home/portable hybrid console, released on Thursday (20th October), didn’t provide enough information about the hardware.

“Nintendo has not come out with any surprises to redefine gaming, as it did with the announcement of the Wii console, but we think the Nintendo Switch addresses some of the issues that came up with the Wii U and looks formidable,” Junko Yamamura of Nomura Securities told The Financial Times.

While Nintendo’s shares climbed by 3.3% following the Switch video preview, by Friday morning they had dropped by over 6%. Analysts point to the absence of a recommended retail price (RRP) or details regarding it hardware and software.

“They must find a way to release the Switch at US$299 to stand a chance; that’s the threshold. It’s not impossible by offering the device in multiple versions,” Toto said, asking, “Who else but diehard Nintendo fans will buy the Switch?”

“No one is saying that the concept is a disaster, but expectations for this launch had been very high,” added Jay Defibaugh, a games industry analyst at CLSA. “Now that it is out there, we are seeing the exhaustion of what has been a share price catalyst in recent months, so today has been an easy moment for some to take profits.”

The Nintendo Switch is set for release in March 2017.

Ashley Allen

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