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Switch Gaming Console ‘Bombs” As Nintendo Shares Crash 34%

When it comes to top mass market sellers this holiday period the Playstation has it while the Nintendo Switch is being seen as a console consumers could easily forget, which is why the Companies shares have plunged 34%.

The device debuted last year as a hybrid console that could be carried around, it was classic Nintendo — a new gadget that broke the norms of conventional video games, but consumers have a different view with the early hype drying up as owners tell of their lack lustre experience and that many have moved on to other devices such as PC gaming over a Nintendo made product.

Equipped with a built-in screen and hypersensitive controllers, the Switch was billed as a worthy successor to the Wii, Nintendo’s rule-breaking blockbuster console. Nintendo’s objective in launching the product was to take on Playstation and Microsoft’s Xbox.

 

The Japanese Company claimed that consumers would get a gaming experience as seamless as possible you could also turn the device into virtual piano or motorcycle.

But according to Bloomberg the Switch has struggled to find customers beyond a core fan base and those were old Nintendo fans anyway.

After cramming its best franchises — Super Mario, Zelda and Splatoon — into the first 12 months, Nintendo has been left with fewer games to show off in the second year and this is set to hurt sales.

Also contributing to the products lacklustre performance in Australia is poor PR with tech publications not given a product to review. At one stage Nintendo’s Australian PR manager when approached said that she had “Never heard of ChannelNews or SmartHouse”.

When the device was launched the Wall Street Journal described the new gaming machine as “like playing a Beta Test”.

The device was only sent out to selected reviewers, who in the past have delivered “positive” reviews for Nintendo the Japanese Company failed to let these same reviewers see or even try their online store.

For the simple reason and unlike the Sony Playstation or the Microsoft Xbox there was no online store, no online multiplayer gaming and no nongame apps for reviewers to see.

The WSJ said that ‘In terms of processing power, it doesn’t measure up to the latest PlayStation and Xbox consoles, which offer high dynamic range, or HDR, gaming, 4K video streaming and far better graphics’.

At one stage this year Nintendo moved to cardboard accessories called Nintendo Labo, but this failed dismally. Like the Wii, they were designed to appeal to non-gamers to broaden the device’s customers beyond core fans.

“All great consoles need a great second year, and Nintendo hasn’t delivered one for the Switch,” said Cornelio Ash, an analyst at William O’Neil & Co. in Los Angeles.

Nintendo has declined to comment.

In Australia the holiday quarter historically accounts for about half of Nintendo’s sales, and analysts have been reducing their full-year estimates for operating profit and revenue since March.

Nintendo shares have dropped 34 percent since a January peak, wiping out $21 billion in market value.

“The stock is heading back to the level when the Switch was announced, which doesn’t say great things about its long-term prospects,” Ash said.

“I don’t see sales growing unless the price is reduced to below US$200,” said one analyst indicating a 33 percent cut from the Switch’s current price. The device is selling at Big W for $499 which is seen as extremly expensive.

While a lower price sticker would help boost Switch sales, it may further depress sales of the 3DS. Ever since the Switch was announced, analysts have expressed concern that it will cannibalize sales of Nintendo’s other portable gaming device. Those fears have been borne out, with total 3DS revenue down by almost two-thirds this fiscal year.

Nintendo claim they are planning big releases next year, including a new Animal Crossing game, a Pokemon title and the latest instalment of its Metroid series. “But once bitten consumers fail to come back a second time” said another analyst.

 

Bloomberg said that If Nintendo posts a weak holiday quarter or Switch shipments show that it will probably miss the fiscal-year target, executives will face tough questions on how they plan to regain lost momentum. That could open up possibilities for bigger changes to the platform next year.

“The Switch excitement has rapidly declined,” Cornelio Ash, an analyst at William O’Neil & Co said. “Unless there’s significant change or something else new, the Switch story has been exhausted.”

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