By Reinier Macatangay
Despite the excitement generated by fans following Nintendo’s Switch press conference a few days ago, not everyone is optimistic about the company’s future. Their stocks actually went down after the big unveiling, falling by nearly six percent last Friday.
Investors do not seem too sure about the Switch’s future success. One valid concern is the high-ish price point.
Yahoo Finance’s Ryan McQueeney wrote, “2016 ended rather poorly for Nintendo, and it looks like investors are not convinced that the Switch will help turn things around. Many were surprised about the price point, as it seems the market was expecting the Switch to be priced lower than the Nintendo Wii U console.”
The majority of older Nintendo fans who are working may not care, but the $300 tag brings the question of whether the Switch can appeal to a mass audience like the Wii did in 2006 when it started at $250.
Another pattern working against Nintendo is the rising popularity of smartphone games, as the Switch is seen as a hybrid home and portable console.
McQueeney touched upon the topic in his article.
“Shifting consumer behavior has had a huge impact on Nintendo, which has thrived as the casual gamer’s top choice for years. However, these less-serious gamers are simply opting to get their fix through smartphone games.”
Of course, most fans will bring up the success of the portable 3DS, which started a bit slow years ago when it first released, but continues to thrive in today’s changing market.
Additionally, as shown in a Business Insider article, not everyone is down on the new console.
Matt Weinberger offered some hope by writing, “In a note on Friday, Jefferies reiterated its ‘Buy’ rating of Nintendo, saying that while the $299 price of the Switch was ‘not great. But its [sic] not bad either,’ and that the nifty concept and lineup of games like ‘The Legend of Zelda: Breath of the Wild’ should drive demand.”
He also brought up looming concerns in the last few paragraphs.
“Traders are already skeptical of Nintendo. The Wii U, Nintendo’s latest console, was a major flop, selling only 13 million units in its five-year life span. For comparison, the original Wii sold 101 million units in its lifetime.”
“If Nintendo can’t prove them wrong, the gaming legend will be facing new shareholder pressure to change its course, and potentially even to take its focus away from building hardware at all.”
In other words, some analysts believe Nintendo might give up on the home console business and concentrate on software, and possibly the 3DS, in future years.
The answer will come soon.
Those excited about Nintendo’s Switch can buy one (hopefully) on March 3 for $299.99.
from Nerd Reactor
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