Nintendo's Stock Price Drops Over Six Percent After the Switch Announcement

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Nintendo's Stock Price Drops Over Six Percent After the Switch Announcement

nintendo-switch-320

Analysts are skeptical of the appeal of Nintendo's just-announced home console/portable hybrid.

In the run-up earlier this week to yesterday's Nintendo Switch announcement, Nintendo's stock price rose by 4.6 percent, representing a $1 billion bump in the company's market value. But once the Switch was announced yesterday, something happened that Nintendo probably didn't expect: its stock price fell.

When the Tokyo Stock Exchange closed today, Nintendo's stock price was down 6.5 percent, erasing the gains it had made earlier in the week. That drop also wiped out the market value gains mentioned above. Why did the announcement drop the stock price?

Dr. Serkan Toto, an analyst in Asia, told GI.biz that he's skeptical of the concept the Switch is based on. "Sorry, but is a portable/home console approach really that innovative in 2016? I am most concerned about the target group of the device: who else but die-hard Nintendo fans will buy the Switch? The Switch lacks a killer feature, and I think it will be very difficult for Nintendo to win back the casual gamers that are mostly on mobile now." Toto went on to say, "I find it very difficult to picture a scenario where a critical number of mobile, free-to-play users converts to console and buy hard- and software for several hundred dollars upfront. Different markets, very difficult to bridge."

Toto is not alone in this sentiment, either. SuperData's Joost van Dreunen said, "I have my reservations with regards to the breadth of the audience it targets. The Switch will likely be most popular among a younger audience: its functionality is uniquely geared toward pre-teens and teenagers. While the device seems much less like a toy than we're used to from Nintendo, its features like backseat multi-player and the ability to have several people play using a single piece of the controller target Nintendo's traditional audience. The reveal video makes a lot more sense to me if you swap out all the adults in it with kids."

Obviously, Nintendo would prefer to have their stock price continue to rise, but the concerns these analysts cite are definitely worth considering. It's also true that we don't know everything about the Switch yet. There could be features on the console that change everyone's perception of it. We'll just have to wait and see, as Nintendo has said there won't be any more information forthcoming until next year.

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That's disheartening. For my money I really like the focus on convenience (something modern consoles are moving further from every generation) and the potential value of getting a console and a handheld together in one package. Early days and all that but I already had this pegged as the first Nintendo gaming device I might go in for since the original Wii.

That's a pity, this actually looked like a decent idea, a little fiddly having to constantly change things around but it also looks small and portable even as a home console so bringing it over to a mate's house for games would be easy...

Well I certainly doubt the decision not to release any more info regardings specs and games is going to help this fact.

Like...is the hardware not finalized yet? Or games for that matter? What's the justification for not telling people this stuff if your console launch is 5 months away?

I do like the idea as an adult who has so far avoided most Nintendo products. I did buy a WiiU though, and got burnt on that, so forgive me for being skeptical.

Every time I hear about Nintendo's stock prices notably going down, I just wish I could buy Nintendo stock soooooo fucking badly, cause Id buy every fucking time. Cha-ching.

Not getting my hopes up here.

As someone who has rather large hands, the idea of breaking apart the device to be able to play multiplayer with what looks like micro NES controllers barely bigger than if I held a 3DS XL sideways really does not make me too happy. The screen size also leaves me a bit lacking since I did not exactly like the Wii U's controller screen. The idea of playing a triple A game on what amounts to a postage stamp these days really doesn't seem that appealing.

Another worry I have is, considering it will supposedly run at least a 5 year old game, will be battery life and how hot will it run over a prolonged period of time? Will it become uncomfortable to hold on a long trip?

How sturdy will the connections be between the controller bits and the main central piece? What will it take to be able to disconnect the two? Weight and how much stress will it take before either cracking or something worse happening?

All of these are pretty heavy issues that bear down on a company that could sink this product before we even talk about what games it runs or it's 3rd party support.

I had no interest in a Wii U, I do have an interest in the Switch. I think the name is better than Wii, but still terrible.

The NX would have been a better choice, and everyone already has heard of it and been awaiting news regarding it. The Nintendo Switch sounds like a scandal, or something you beat someone with.

Some discarded names might have been the Toggle, Game Trans, That box what plays Zelda, Morph, Nintendo Ultra, Ultra Gameboy, Snap, Crackle, Pop, and Hive.

Pretty much nails irt on the head I think. They show adults but really it's a device for kids. Worse they will probably realize that this may well be replacing the Gameboy line in the same breath. Why produce two pieces of hardware when you can produce one.

It seems many of the japanese old guaerds are undergoing meltdown.

The investors probably wanted the console to be the ideal device that would make whales to put their smartphones in sleep mode and pour all their time and money into it. Needless to say, Nintendo Switch doesn't seem like that.

MonsterCrit:
Pretty much nails irt on the head I think. They show adults but really it's a device for kids. Worse they will probably realize that this may well be replacing the Gameboy line in the same breath. Why produce two pieces of hardware when you can produce one.

It seems many of the japanese old guaerds are undergoing meltdown.

I don't see how the XBox One and the PS4 aren't devices for kids. If you take out the M-rated games, what's the adult part left?

Battenberg:
That's disheartening. For my money I really like the focus on convenience (something modern consoles are moving further from every generation) and the potential value of getting a console and a handheld together in one package. Early days and all that but I already had this pegged as the first Nintendo gaming device I might go in for since the original Wii.

What exactly is a console for you? Because the switch sell itself as console/portable hybrid, but really its a portable and nothing else, the only difference is that instead of using a cable to connect to the TV you have a big bulky base...yay? It seems like people are expecting the equivalent of a PS5 in there pocket, but it'll at best be equivalent to a PS4 when the PS5 will be coming out, just like the wii U there probably won't be any multi platform title, just port of older games.

I'm of two mind when it comes to the switch, but I think it'll do well because it's essentially the next DS/Gameboy, which all did very well, but at the same time it pretty much signal Nintendo abandoning the console market, which means there accepting lower revenue (instead of selling a boatload of next gen DS and next gen console, often to the same people, they'll only sell a boatload of switch.

Personally, it's rather nice for me. I like Nintendo game but I really dislike pointless gimmick like the wii and wii U had and the switch is blissfully free of those.

Blaine Houle:
Another worry I have is, considering it will supposedly run at least a 5 year old game, will be battery life and how hot will it run over a prolonged period of time? Will it become uncomfortable to hold on a long trip?

How sturdy will the connections be between the controller bits and the main central piece? What will it take to be able to disconnect the two? Weight and how much stress will it take before either cracking or something worse happening?

I figure it'll be doing things in a similar manner to what laptops do: running the hardware full-tilt when plugged in to drive the games at 1080/60 (I hope) on the main screen, and then when it's unplugged lowering the processor's clock speeds and reverting to a lower resolution and less detailed visuals to preserve battery life.

I'm not too worried about the connection between controller and tablet (the seemingly metal rails should hold fairly well, and DS Lite aside they tend to build their stuff rather sturdily), but I do have some reservations about the thing's battery life. Probably nothing a pair of USB reserve batteries can't take care of, but their track record for battery capacity hasn't been all that great as of late.

CaitSeith:

MonsterCrit:
Pretty much nails irt on the head I think. They show adults but really it's a device for kids. Worse they will probably realize that this may well be replacing the Gameboy line in the same breath. Why produce two pieces of hardware when you can produce one.

It seems many of the japanese old guaerds are undergoing meltdown.

I don't see how the XBox One and the PS4 aren't devices for kids. If you take out the M-rated games, what's the adult part left?

IT's not so much about the games as it is the physical design. I can see those snaps breaking very, very easily in the middle opf an intense gaming session. I don't see adult sized hands getting much milage out of those micro controllers and honestly. I don't see that thing pulling a lot of battery life.

Secondly. Most adults already have tablets. They're not going to carry around a second one.

Well that just makes me want to get one even more. So...well played?

People really shouldn't read into stock prices. Sure it dropped 6 percent today but it'll likely bounce back up over time, especially when the console is drawing closer to release. Thats the thing about stock markets unless it's in a tailspin it tends to bounce up and down, and drastically when things about it are announced to the public.

Xsjadoblayde:
Well that just makes me want to get one even more. So...well played?

It seems like an effective advertisement for Nintendo stock. The whole constant quarterly growth obsession kinda makes people overlook long-term benefits. Which if their list of partners pans out better than it did with the Wii U should be rather significant.

Who's gonna buy this? I'll tell you who: people who want to go to a basketball court with all their friends and then play basketball videogames! That and all the people out there who take their dogs out for a walk at 3am with no intention of going home until 6am. :^)

The biggest mistake they made with the Switch so far was not making it backwards compatible for 3DS games. If Nintendo is trying to lure mobile gamers back to their quasi console then this was a huge misstep.

RJ 17:
Who's gonna buy this? I'll tell you who: people who want to go to a basketball court with all their friends and then play basketball videogames! That and all the people out there who take their dogs out for a walk at 3am with no intention of going home until 6am. :^)

Don't forget the key demographic of people who like to party outdoors around a 5" screen.

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Blazing Hero:
The biggest mistake they made with the Switch so far was not making it backwards compatible for 3DS games. If Nintendo is trying to lure mobile gamers back to their quasi console then this was a huge misstep.

Who says that it isn't? It uses cartridges for games as shown in the video. We also don't know yet if the screen is a touch screen, or if it will have the ability to stream to the docking station to turn the TV into a second screen like the Wii U does. Plus the screen seems big enough to be able to split in two to simulate the top/bottom screens of the 3ds if the need arose. We really don't know yet but given Nintendo's history and the fact that the Switch is meant to replace both 3ds and Wii U, some degree of backwards compatibility seems likely.

MonsterCrit:
Pretty much nails irt on the head I think. They show adults but really it's a device for kids. Worse they will probably realize that this may well be replacing the Gameboy line in the same breath. Why produce two pieces of hardware when you can produce one.

It seems many of the japanese old guaerds are undergoing meltdown.

You nailed it. The world has smartphones and tablets now. Making another one that will have your standard Nintendo franchises but does everything else that a tablet does but much, much worse with a stupidly small capacity hardrive.

And with Nintendo saying there will be no official info until 2017 (when it releases March 2017...) its officially safe to say Nintendo doesn't know how to market to gamers outside their shrinking nostalgia loving hardcore base anymore.

Nintendo's member berries are drying up.

People always have to play Chicken Little over stock prices. Warren Buffet they ain't.

Jingle Fett:

Blazing Hero:
The biggest mistake they made with the Switch so far was not making it backwards compatible for 3DS games. If Nintendo is trying to lure mobile gamers back to their quasi console then this was a huge misstep.

Who says that it isn't?

Official announcement that came out today.

http://nintendoeverything.com/nintendo-confirms-no-physical-backwards-compatibility-for-switch-no-comment-on-mobile-games/

Sorry to squash you rant like that but this was the one thing people defending the "NX" had as a point here and they lost it.

dragongit:
People really shouldn't read into stock prices. Sure it dropped 6 percent today but it'll likely bounce back up over time, especially when the console is drawing closer to release. Thats the thing about stock markets unless it's in a tailspin it tends to bounce up and down, and drastically when things about it are announced to the public.

People should pay attention to stock prices. Remember when Nintendo went up, then down 15+% the week Pokemon Go was released?

Don't get me wrong, Nintendo is still doing better than it was pre-Pokemon Go, but if it is wasn't the time of year where piles of the big selling franchises comes out Nintendo's stock would still be doing mediocre.

This console hinges on having great games out in its first months instead of typical launch placeholders. That Zelda game better be there on release in a bundle.

This is still part of the modern Nintendo cycle though, isn't it? Nintendo announces they're working on a console, Nintendo reveal a console, Nintendo stock prices dip...I feel like this same exact thing happened with the 3DS, Wii U and possibly even the Wii.

Like others have said, I find this reveal to be much more satisfactory than the Wii U reveal. Everything looks solid at the moment but Nintendo really, REALLY has to nail the launch of this thing. The 3DS and Wii U both had abysmal launches and Nintendo really can't afford for that to happen for a third time in a row. Nintendo themselves may not be sharing details on what games are launching on the Switch but that (hopefully) shouldn't stop devs and publishers from announcing that some of their games are being worked on for the NS. Skyrim is all well and good but I'd have liked to see another indie-reel: Cuphead, Song of the Deep, Bloodstained, Yooka-Laylee, show us those games running on the Switch and kids playing them (maybe not Bloodstained) and that would absolutely turn a few more heads...not that the indies saved the Wii U...poor Shovel Knight...

AzrealMaximillion:

Jingle Fett:

Blazing Hero:
The biggest mistake they made with the Switch so far was not making it backwards compatible for 3DS games. If Nintendo is trying to lure mobile gamers back to their quasi console then this was a huge misstep.

Who says that it isn't?

Official announcement that came out today.

http://nintendoeverything.com/nintendo-confirms-no-physical-backwards-compatibility-for-switch-no-comment-on-mobile-games/

Sorry to squash you rant like that but this was the one thing people defending the "NX" had as a point here and they lost it.

Err I don't see how those couple sentences qualify as a rant, but ok. I also wasn't aware there was a debate going on about the Switch since most of the comments I've seen have been positive, but I'm not involved either way.

Anyhow I was fully expecting it to not be hardware backward compatible with Wii U due to the discs but I'll admit I'm a little surprised they're not supporting 3ds games, again given Nintendo's history. That would suggest to me they're maybe planning a much more digital-centric approach, like maybe porting the old games to their store or something since I doubt they'd simply abandon all the old games. Quite interesting since it means they're doing things very differently this time around.

I wonder if I'll have to buy two Switches for myself and for my wife if we plan to play, say, the next Animal Crossing together.

Though I have a feeling the next iteration of Animal Crossing is going to be a mobile game.

Perhaps their big reveal should have been less Mario and more Call of Duty.

Jingle Fett:

AzrealMaximillion:

Jingle Fett:

Who says that it isn't?

Official announcement that came out today.

http://nintendoeverything.com/nintendo-confirms-no-physical-backwards-compatibility-for-switch-no-comment-on-mobile-games/

Sorry to squash you rant like that but this was the one thing people defending the "NX" had as a point here and they lost it.

Err I don't see how those couple sentences qualify as a rant, but ok. I also wasn't aware there was a debate going on about the Switch since most of the comments I've seen have been positive, but I'm not involved either way.

Anyhow I was fully expecting it to not be hardware backward compatible with Wii U due to the discs but I'll admit I'm a little surprised they're not supporting 3ds games, again given Nintendo's history. That would suggest to me they're maybe planning a much more digital-centric approach, like maybe porting the old games to their store or something since I doubt they'd simply abandon all the old games. Quite interesting since it means they're doing things very differently this time around.

I'm not surprised they aren't having the 3DS games be compatible. The lack of a second screen and the lack of it being touchscreen kind of nails that shut unfortunately.

And to your point about porting the older games to the Switch (I assume you mean Wii-U games) I really think Nintendo needs to allow people to access previous digital purchases they made. Nintendo has been serially awful at that, and they frankly need this thing to take off. Forcing people to either buy games they've bought once or twice over as well or waiting for the eventual "Switch Remaster" isn't the best draw for the console.

I like my 3DS, but I'm one of those weirdos that uses my Vita way more, plus I PC game. I just down have the nostalgic love for Nintendo's franchises other have and their 3rd party support is always strong in the first year then dwindles down sharply for their home consoles.

Colour me as "not sold yet." The idea looks interesting but even 5 year old modless Skyrim won't get PC players to ditch a laptop for the Switch. In my opinion at least.

I really hate that new D-Pad replacement though. That'll make fighting games suck to play for sure.

AzrealMaximillion:

MonsterCrit:
Pretty much nails irt on the head I think. They show adults but really it's a device for kids. Worse they will probably realize that this may well be replacing the Gameboy line in the same breath. Why produce two pieces of hardware when you can produce one.

It seems many of the japanese old guaerds are undergoing meltdown.

You nailed it. The world has smartphones and tablets now. Making another one that will have your standard Nintendo franchises but does everything else that a tablet does but much, much worse with a stupidly small capacity hardrive.

And with Nintendo saying there will be no official info until 2017 (when it releases March 2017...) its officially safe to say Nintendo doesn't know how to market to gamers outside their shrinking nostalgia loving hardcore base anymore.

Nintendo's member berries are drying up.

This is the issue. Nintendo has produced a product as a "solution" to a problem that was solved half a decade ago. Had the Switch come out five years ago it could have been a runaway success. But nowadays, consoles, handhelds, PCs, smartphones, and tablets are ubiquitous. They're everywhere, and most people have at least two of those devices. Yet here we have Nintendo announcing a device that allows us to 'game at home and on the go!' Uh, thanks Nintendo, but I already do that. I've been doing it for years. So has everyone else.

It's classic Modern Nintendo. Too little, too late. They're forever lagging behind the rest of the industry.

This is what happens when you become complacent, turn inwards, and assume everyone else is playing catch-up to you. Eventually they catch you, then surpass you.

It's a testament to how people interpret consoles when they're still going with Sony/Microsoft despite increasing hassles regarding pricing versus actual versatility in the living room, whereas a console with additional freedom is a tough sale. You could give the other two week long loading times for massive, uncompressed files, and double the online service costs, and people would still rather develop for and interact with the super expensive, basically a worse PC that's splitting console development with two additional graphical specifications, whose only shrinking market advantage is being in the living room. We're in a living hell where the only reason we have shitty things is because we willingly attach ourselves to them.

I think the idea is cool, but one they will almost 100% not deliver on. Skyrim and 2K on a handheld at a resolution greater than 600p at at least 30 FPS? Bullshit. If it is revealed that those two games won't actually be coming to the Switch...

Gee... The Japanese analysts are almost as full of it as ours.

Nintendo fulfilled nearly every bit of speculation based on the shreds of data that were floating out in the ether, and this is the result.

Granted, I think the trailer's portrayal of a packed stadium roaring to see young professional gamers bring out their trendy Switches to engage in a tense game of Splatoon is a little hyperbolic. But there's nothing to suggest that the ability to engage multiple audiences inherently means the inability to serve any of them well. Handheld gaming on a plane? Social gaming on the road? Locally networked gaming across multiple systems? Gaming in a living room on a big TV?

If it can do all of that half-way decently, and at a price that's comparable to its competition, why wouldn't you want that? To dismiss it as a toy of limited appeal seems both unprofessional and unimaginative. Frankly, it seems like the sort of response I would have expected twenty years ago, not from people whose job it is to knowledgeably evaluate markets who ought to know better by now.

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