Nintendo Stock Falls on Lower Switch Console Sales Forecast
Video game giant Nintendo's stock fell 9.2 percent in Tokyo on Friday, the day after it reported operating profits of $1.46 billion (￥158.6 billion) for the crucial October to December period and lowered its sales forecast for the Switch console.
Investors were spooked by the company cutting its full-year forecast for Switch sales by 3 million to 17 million, even though its original prediction was widely seen as overly ambitious. It also cut the sales forecast for its handheld 3DS device, which has been on the market for eight years, from 4 million units to 2.6 million.
However, it raised its software sales forecast for the Switch from 100 million to 110 million after strong hardware sales over the holiday season, when it sold 9.41 million consoles, up 30 percent from the previous year.
Nintendo maintained its fiscal full-year profit forecast of $1.5 billion (￥165 billion yen). Its fiscal year runs April to March.
At a strategy briefing on Friday, CEO Shuntaro Furukawa, who took the reins at the Kyoto-based company last year, laid out plans for future profitability based on three pillars: its dedicated console business, mobile gaming and leveraging intellectual property (IP).
"Cumulative global sell-through … has surpassed 30 million units as of the end of January, and the Nintendo Switch business is on a trajectory for further growth," said Furukawa, who also touted Nintendo's Switch Online subscription service, which has attracted more than 8 million users.
The Super Nintendo World area at Universal Studios Japan "is to open in time for the 2020 Tokyo Olympics," added Furukawa. "In addition, the development of an animated film based on Super Mario Bros. with Illumination is moving along for an anticipated theatrical release around 2022."
Nintendo is also to open its first dedicated store in Japan in the fall, set for Tokyo's Shibuya district.
Business daily the Nikkei also reported Friday that Nintendo plans to launch a cheaper version of the Switch later this year and a premium subscription service. The new Switch is likely to focus on more portability; the current console is a home-handheld hybrid device.
Nintendo shares have now lost more than a third of their value over the last year, despite a recovery since January.
This article was originally published by The Hollywood Reporter.