Nintendo stock falls after new console unveiled
Shares dropped 6 percent in early trading; new machine is pitched as a 'hybrid' as consoles come under attack from smartphones
Nintendo Co Ltd offered a sneak preview of a new gaming system that can be used both as a traditional console as well as a handheld device, but a lack of revolutionary features helped send its shares sliding 6 percent.
In a 3-minute video teaser, the Kyoto-based games company unveiled Nintendo Switch, its first new gaming device in four years, which will launch in March 2017. It remained, however, silent on the key issue of pricing.
Its success will be crucial as Nintendo still considers console gaming to be the centre of its business, even as casual gaming has moved to smartphones and tablets and as it last console, the Wii U, flopped badly.
If sales disappoint, the company will come under even more pressure to embrace smartphone gaming – something it has only just begun to do.
“The trailer does not show the device being played in interesting new ways, gameplay looks to be surprisingly similar to gaming with any number of other consoles,” Takeshi Koyama, a senior analyst at Mizuho Securities, wrote in a report to clients.
He added that many aspects of the new device remained unclear, such as whether the screen on the main unit is a touch screen or whether it can be synced up with other smart devices.
The Legend of Zelda, Super Mario, and Splatoon are among the games lined up for the console, the trailer showed, while dozens of publishers such as Activision Publishing Inc, Electronic Arts Inc and Take-Two Interactive Software Inc are developing games for the device.
Eiji Maeda, an analyst at SMBC Nikko Securities, said the games should go down well with traditional Nintendo fans but there were no games shown that seemed to break new ground.
Nintendo has sold only 13 million Wii U consoles since its launch in 2012, compared with 101 million sales of its predecessor, the Wii, launched in 2006.
That flop helped push Nintendo into mobile gaming, leading to the runaway success of Pokemon GO and plans to debut its game franchise Super Mario Bros on Apple Inc’s iPhone in December.
Shares in Nintendo were down 5.7 percent in afternoon trade on Friday, giving the company a market value of about US$35 billion. The stock is, however, still up some 70 percent since early July on hopes that Pokemon GO and Super Mario Bros on the iPhone will be big contributors to earnings.
(Reporting by Makiko Yamazaki and Taiga Uranaka in Tokyo; Additional reporting by Aishwarya Venugopal in Bengaluru; Writing by Miyoung Kim; Editing by Edwina Gibbs)