Nintendo Shares Slump 8% as Switch 2 Price Hike and Fewer Games Rattle Market
Market Reaction to Nintendo's Switch 2 Strategy
Share Price Drop and Market Concerns
TOKYO, May 11 (Reuters) - Nintendo's shares fell 8% in Tokyo on Monday after the company hiked Switch 2 prices and as the market frets over a lack of high-profile games to build momentum.
Nintendo posted robust hardware sales for the financial year ended March but, while the company is known for its conservative forecasts, its outlook for this year underwhelmed the market.
Game Pipeline and Franchise Performance
The Kyoto-based firm extended the life of the original Switch with games from franchises such as "The Legend of Zelda" and, while it has scored recent hits such as "Pokemon Pokopia", it is seen as lacking potential blockbusters.
Analyst Perspectives on Nintendo's Guidance
"The year-on-year decline in game shipment guidance risks signaling that Nintendo lacks confidence in its pipeline," Morningstar analyst Kazunori Ito wrote in a note.
"However, as user engagement typically accelerates in the second year of a console cycle, we view this as too pessimistic," he wrote.
Switch 2 Price Hike Details
Nintendo also said it would raise prices of its Switch 2, with the Japanese language Switch 2 Japan model to go up by 10,000 yen ($63.73) to 59,980 yen from May 25 and prices in markets such as the U.S. to rise from September 1.
The company has an audience among casual gamers who are seen as particularly sensitive to price hikes, which come as electronics makers grapple with a memory chip price surge.
Outlook for Upcoming Game Releases
The second year "is crucial and our non-consensus view is that it will release a Mario AAA game this year," Jefferies analyst Atul Goyal wrote in a note.
($1 = 156.9100 yen)
(Reporting by Sam Nussey; Editing by Sam Holmes)
