Switch console a massive success for Nintendo - TechCentral

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Switch console a massive success for Nintendo

Traders are sending signals that Nintendo’s newest console Switch may be on its way to becoming a bigger hit than the Wii, the company’s best selling home console of all time.

Since the Switch went on sale on 3 March, the Kyoto-based game maker outperformed the broader Japanese stock market by 20 percentage points through to Thursday. That’s more than double the 8,9 percentage point outperformance during an equal time period that followed the Wii launch in 2006. It’s also far ahead of the nearly 30 point lag shares suffered in 2012 after the disastrous launch of the Wii U, which went on to become Nintendo’s s worst selling home console in history.

The strong performance has come despite criticism of the Switch’s small software line-up and reports of hardware issues, such as the console physically bending after continued use and poor reception with its controllers. Others have bemoaned the difficulty in finding a unit even a month after launch.

The company’s long history of conservative production targets has some analysts worried. Jefferies Group analyst Atul Goyal estimated that 2,5-3m Switch units were sold in March, ahead of Nintendo’s target of 2m. But he warned the company could disappoint on 27 April when it announces sales forecasts for the fiscal year through to March 2018.

“Nintendo’s guidance of Switch volumes and OP (operating profit) numbers could very well underwhelm the market,” Goyal wrote in a report to clients this week.

Limited supply has driven up prices on some auction sites. On eBay, the Switch goes for an average price of US$450/unit, a 50% markup to the retail price. In Japan, premiums range from from 15-40% on Yahoo Japan, operator of the country’s main auction site.  — (c) 2017 Bloomberg LP

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