After the Japanese gaming behemoth announced it will raise the price of its Switch 2 device and issued a warning of reduced profitability, Nintendo’s stock dropped by about 10% on Monday.
The company announced on Friday that it anticipated a 27% decline in net profit for the current fiscal year, citing a poor selection of new games as the reason.
Manufacturers of gaming consoles and other gadgets have also been impacted by the artificial intelligence boom’s skyrocketing memory chip prices, and supply issues have been made worse by disruptions related to the Iran war.
Nintendo shares fell as much as 9.9 percent to 6,908 yen in early Tokyo trading on Monday.
Nintendo said Friday that the Switch 2 price in Japan will rise 20 percent from May 25, and from September 1 by 11 percent in the United States to $499.99 and in Europe by six percent to 499.99 euros.
The firm’s net profit surged 52 percent to 424 billion yen last year on annual sales of 2.31 trillion yen, nearly doubling from the previous year.
By the end of March, the company had sold 19.86 million units of its new console, thanks to games like “Pokemon Pokopia”, “Mario Kart World” and “Donkey Kong Bananza”.
But gaming industry consultant Serkan Toto told AFP ahead of the results that Nintendo is in a difficult position as Switch 2 customers are “especially price sensitive”.
“The first year game lineup for Switch 2 is much weaker than for its predecessor,” he said.
“But now it’s time for them to really step on the gas on the software side.”
*
Email *
Website
