Nintendo 'Surprised' Shares Dropped Following Switch Reveal

Nintendo Switch Secondary Screen

Nintendo president Tatsumi Kimishima says that he was 'surprised' that investors had such a negative reaction to the Nintendo Switch, as the company's shares dropped.

The day before the Nintendo Switch was revealed, excitement for the yet-to-be-announced console was so high that Nintendo's market value increased by $1 billion. However, this didn't last long as right after the reveal, Nintendo's stocks dropped by 6.5 percent, wiping that added $1 billion out. Analysts and investors alike just didn't seem that into the hybrid home console/handheld device.

Speaking to Bloomberg about the Nintendo Switch, the company's president Tatsumi Kimishima says that he didn't expect the market to have such a negative reaction to the console's announcement. "To tell you the truth, I was surprised," explains Kimishima, "I had wondered about the reaction. But I don't understand why. And there's no real point in me talking about the stock price." The president also notes that Nintendo's revenue has "fallen for eight straight years" and that it aims to both "increase the number of people who play games" and "deliver all kinds of new surprises to our customers" in an effort to increase income.

Nintendo Switch console

Although Kimishima may be clueless as to why the company's shares dropped, some have suggested that it's because investors just aren't convinced that the Switch will be a huge success, such as the Nintendo Wii. Nintendo itself has set conservative estimates for the console, as it's planning to ship 2 million Nintendo Switch units in (launch month) March. Kimishima also admits that because of momentum, "the first year after [the Nintendo Switch] goes on sale will be extremely important" and so 2 million again seems like a low figure to get the ball rolling.

Also contributing to the uncertainty is that there's lots that people don't yet know about the console. The Nintendo Switch's price and battery life are set to be huge factors on how well the console sells and yet this information will not be revealed until early 2017, in a recently announced Switch presentation. That means that vital information about the product won't be disclosed until just a few weeks before gamers are expected to drop (what could be) hundreds of dollars on it.

Conversely, confirmation about launch details and hardware (such as the possibility that the Switch has a multi-touch screen) could lead investors to change their minds. Just a handful of games have been confirmed for the platform too, but should Nintendo officially announce titles like the (rumored) new Mario game, this could also make betting on the Switch worth it.

Source: Bloomberg

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