Nintendo falls on the Tokyo Stock Exchange, weighed down by a potential postponement of the Switch 2

(BFM Bourse) – The video game publisher’s action ended sharply lower on Monday as Bloomberg reported that the Kyoto company had indicated to other publishers that its new console would not be released before the start of next year.

Nintendo is suffering on the stock market this Monday. The action of the famous video game group based in Kyoto and known for its licenses such as Mario or Zelda lost 5.8% on the Tokyo Stock Exchange.

The Japanese publisher has suffered from press reports reporting a postponement of the commercial launch of its new console, currently called “Switch 2” by the specialist media. According to Bloomberg, the Japanese company has informed third-party publishers that it now expects this console not to be released until March 2025, at the earliest. Which quite simply means that this new machine would not be available during the 2024 Christmas holiday period, obviously conducive to video game purchases.

As we wrote in a previous article, Nintendo shares have had a sparkling stock market performance, gaining more than 50% over one year and nearly 14% since January 1, despite Monday’s drop. Its valuation thus appeared to be strained and likely to suffer from profit taking in the event of bad news, such as the information reported by Bloomberg this weekend.

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A very old Switch

Especially since the jump in Nintendo stock in recent months has been partly fueled by speculation about the announcement of this new Switch 2 console.

“It seems like there are a lot of new buyers of (stock) Nintendo who are perhaps less familiar with the name and more eager for the company to post visible numbers,” Mio Kato of LightStream Research. “Nintendo’s numbers for the March 2025 fiscal year could start to look inglorious if key games are delayed while the current console has aged significantly,” he added.

“If the rumors are true, then 2024 will probably be a fairly difficult year for Nintendo,” Serkan Toto, director of the analysis firm Kantan Games, commented to Agence France Presse on Monday.

The Switch, a versatile console that can be used as a home console or a portable console, will celebrate its seven years on the market next month, which constitutes a very long life cycle for this type of machine. “The Switch is approaching the end of its cycle and stocks lack catalysts until the arrival of the new console,” Morningstar already judged in May 2023.

Nintendo management has so far avoided giving the slightest indication on the release of a hypothetical new machine. Shuntaro Furukawa, the president of Nintendo, thus avoided the slightest comment on this subject during the conference which followed the presentation of the video game publisher’s latest results.

The third best-selling console in history behind the Playstation 2 and the Nintendo DS with around 139 million units, the Switch nevertheless has good commercial momentum given its venerable age. The Super Mario Bros film notably brought additional notoriety to the group’s already well-established licenses. Which supported the sales of its consoles. At the start of the month Nintendo raised its sales forecast for Switch consoles to 15.5 million units for the financial year ending next March, compared to 15 million previously.

Julien Marion – ©2024 BFM Bourse

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