Japanese gaming giant Nintendo has cut its yearly sales targets for the Switch console, resulting in a 9.3% drop in its share price.
The company announced today that it would be lowering its sales estimates from 20 million consoles to 17 million for the rest of the financial year, which ends on 30 March, reports US-based news site CNN.
The broadcaster argues the targets show that the Switch “may not have the massive appeal that Nintendo was banking on”, despite the company posting a 25% rise profits for the quarter that ended in December.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
It’s a statement backed up by Amir Anvarzadeh, an analyst at Asymmetric Advisors, who told Bloomberg that Nintendo’s revised targets are “worse than even I expected”.
The analyst, who recommended investors sell shares in the games giant back in May, added that Nintendo “has no option but to drastically cut its Switch price tag and hope for the best”.
But not everyone agrees that Nintendo is beginning to lose momentum.
Speaking to the Financial Times, Serkan Toto, chief executive of video game consultancy firm Kantan Games, said the lower sales forecast came as little surprise given that the original target was “ridiculously” high.
“The actual situation at Nintendo is much, much better than the mood around the shares suggests,” he told the FT. “I see nothing that justifies a share price fall this big.”
Toto may be right, as IGN says that Nintendo has sold 32.27 million Switch consoles since it launched in March 2017, with game sales totalling 163.61 million units.
There was also substantial growth in December after the launch of Super Smash Bros. Ultimate, elevating the Switch to being 2018’s bestselling games console, says Forbes.
However, some believe the Switch’s £279.99 price tag is a little expensive in today’s market, especially as its rivals cost less and often come bundled in with a game.
But that may soon change, as Ars Technica claims that Nintendo is developing a cheaper, smaller model that will be available only in hand-held form.
Whatever happens, Nintendo’s Switch still looks like the console to beat in 2019.
Create an account with the same email registered to your subscription to unlock access.