Will Nintendo flip the switch on gaming fortunes?

Nintendo Switch has gamers excited and investors scared, but who's really the expert? Photo / Nintendo
Nintendo Switch has gamers excited and investors scared, but who's really the expert? Photo / Nintendo

Nintendo, the Kyoto-based gaming giant behind Super Mario and the Legend of Zelda, has stayed in the fight with Microsoft and Sony where Sega gave up eons ago. After some embattled times, their new console, Nintendo Switch, was announced on Friday.

Investors went cold immediately after the announcement of their new home and portable console, formerly codenamed NX, but it might not be all doom and gloom as the gaming media reaction has been mostly positive and bodes well for the Switch.

When Nintendo teased the upcoming announcement video on Twitter, their stock got caught in the hype, rising 3.3 per cent and boosting the company's market value by more than $1 billion. However, after the video was released, the stock price plummeted by 6 per cent.

The video game company behind the widely successful Wii, 3DS and Pokemon franchise has lost some ground since the release of the ill-fated Wii U console.

President Tatsumi Kimishima said recently in a shareholders meeting that the company struggled to sell the appeal of the Wii U even before the console was launched.

As of July this year the company has sold 13 million Wii U units, which when compared with the Wii (101 million) PS4 (43.5 million) and 3DS (59.7 million) is a bad result for the gaming giant.

Sales of the 3DS have remained strong, particularly due to the success of Pokemon Go leading into the new Pokemon Sun and Moon which have just launched on the handheld console.

Pokemon Go's success had a relatively low impact on the company's financial profits and forecasts despite their stock value overtaking that of rival Sony. Nintendo only owns 32 per cent voting share in the Pokemon Company, and when they told investors as much, their stock price plummeted.

However, the company never hid the fact that it wasn't the sole owner of Pokemon - some investors just assumed it was.

There are a few good reasons for the stock value to drop in the lead up. One is that tech hype can be sold - literally. Apple's stock does the same thing in the lead up to announcements. People buy stock and sell it while the price is high.

Another is that the average gamer probably knows more about Nintendo Switch than investors do. Forbes contributor Ollie Barder said that "the markets don't tend to "get" gaming at the best of times."

Finally, they didn't give a price. Nintendo is up against rival powerhouses Sony and Microsoft in the console space, and many believe that if they do not offer their new device at a lower price than the competition, they will not succeed.

Nintendo has said they will not make any more announcements about the Switch until 2017, with console due to be released in March.

- NZ Herald

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2017, NZME. Publishing Limited

Assembled by: (static) on production bpcf03 at 27 Apr 2017 22:23:44 Processing Time: 605ms