Nintendo Switch announcement sends Nintendo stock price south

Chris Stead 21 October 2016

NINTENDO-SWITCH

The launch of the Nintendo NX has seen a small but noticeable drop in investor support for the company, on par with that seen at the launch of the Wii U.

Early this morning, Australian rose to news of the Nintendo Switch, the official name of the next console from the gaming juggernaut. While the internet digests what it has seen, investors are starting to have their say.

Yesterday, on October 20, the announcement of the planned launch announcement for the following day caused a spike in Nintendo's share price, with a 4.2% rise. However, following the trailer’s release and the subsequent discussion, that groundswell of enthusiasm has faded, with a 7.1% drop.

nintendo-switch-nvidia

So over the course of the 24 hours, Nintendo saw its net value drop 3.2% on the back of the Switch.

It will take a few days for the dust to settle and investors to judge the general feeling of consumers, and obviously there is plenty more to be announced (especially a price for the console). Nonetheless, it’s a reaction worth noting. It’s also worth pointing out that this drop is similar to the drop that occurred around the first reveal of the Wii U back in June 2011. The share price dived 11% over that period, but that was during a period of continued decline for Nintendo off the company-high spike of the Wii in its 2008 heyday.

nintendo-switch

As of mid-2016 and on the back of Pokémon Go, Nintendo’s shares were trending up, having reached a six-year high in July.

In general it would appear investor enthusiasm for the Nintendo Switch is low (or cagey at best). When the company announced it was getting into mobile gaming in late 2014, for example, the market responded with a 30% increase in shares. While that subsequently dropped back down, it at least showed where the investor community believes Nintendo’s future can be.

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