TOKYO, May 11 – Gaming company Nintendo saw its stock value drop 8% during Monday trading in Tokyo following announcements of higher Switch 2 console prices and investor concerns about weak upcoming game releases.
The Japanese gaming giant reported strong hardware sales during the fiscal year that concluded in March, but the company’s conservative projections for the current year failed to meet market expectations.
The Kyoto-headquartered company has kept its original Switch console relevant through popular franchise releases including “The Legend of Zelda” series, and despite recent successes like “Pokemon Pokopia,” analysts believe the company is missing potential major hits.
Morningstar analyst Kazunori Ito expressed concerns in a research note, stating “The year-on-year decline in game shipment guidance risks signaling that Nintendo lacks confidence in its pipeline.”
However, Ito added optimism about future prospects, writing “However, as user engagement typically accelerates in the second year of a console cycle, we view this as too pessimistic.”
The company also announced Switch 2 price increases, with the Japanese-language Switch 2 Japan model rising by 10,000 yen ($63.73) to 59,980 yen starting May 25, while U.S. market prices will increase beginning September 1.
Nintendo’s customer base includes many casual players who tend to be especially affected by price increases, which arrive as technology manufacturers face rising memory chip costs.
Jefferies analyst Atul Goyal noted the importance of the second year in a console’s lifecycle, writing “is crucial and our non-consensus view is that it will release a Mario AAA game this year.”
