Nintendo Shares Plummet, No Date For New Switch
Following the release of disappointing forecast numbers and the announcement that the new Switch console will not be showcased at this year’s E3, Nintendo shares fell as much as 5 per cent.
Operating profit for the three months ended March 31 was A$377.40 million (29.7 billion yen), well below the A$455.43 million analysts expected, according to Bloomberg.
As reports indicated that a new cheaper version of the Switch was on the horizon for a 2019 launch in addition to a strong new lineup of games shares rose 32 per cent this year.
Nintendo reported 16.95 million Switch consoles sold in fiscal 2019 and expects this to rise to 18 million consoles in the current fiscal year ending March 31, 2020, below analysts estimates of 18.5 million.
Shares jumped 15 per cent following Tencent Holdings — who have the distribution rights to Nintendo Switch consoles — which received certain approvals to sell the consoles in China
The rollout of the Switch console in the China market would no doubt improve Nintendo’s numbers, however as reported in Bloomberg, Nintendo President Shuntaro Furukawa has confirmed there is no timeline for the launch.
Additionally, Furukawa has confirmed that there is no plan to unveil the new Switch console at E3 this June.
“As a general rule, we’re always working on new hardware and we will announce it when we are able to sell it. But we have no plans to announce that at this year’s E3 in June.”
Bloomberg reports that analysts believe Nintendo will not release a new console as it would “cannibalize” current stock.
Nintendo is expected to release a strong lineup of games including two Pokemon titles and the latest in the popular Luigi’s Mansion and Animal Crossing series, and a remake of a Zelda title.
According to Reuters, the gaming console company has advised of a 5.4 per cent rise in Switch game software sales YoY to 125 million units, which analysts see as “conservative”.
The Kyoto company sold 119 million gaming titles last fiscal year, slightly below analyst estimates for 121 million, and expects 125 million to sell in the current period, below projections for 161 million.
Shares dipped following the announcement of Google’s Stadia, and with Microsoft also delving further into cloud gaming and away from console-based play, the Kyoto-based company could be in danger of hindering its own progress if the new Switch is kept under wraps for much longer.