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Nintendo on track to miss two-year sales targets for Switch, say analysts

Platform holder's share price down 33% from January peak

Nintendo's share price continues to slide as the Switch looks likely to miss its two-year sales projections.

According to an analysis report from Bloomberg, the Switch is likely to fall short of Nintendo's 38 million sales target set for March by nearly three million units.

Nintendo enjoyed a resoundingly successful first year with the Switch, which became the fastest-selling Nintendo console of all time.

However, concerns that the platform holder would be unable to maintain such momentum after front-loading the console's launch with flagship titles may not have been unfounded.

Nintendo's share price has fallen 33% from roughly $435 to just under $300 since January, as it slides closer and closer to Switch pre-release levels.

Much like the Wii, Nintendo hoped that the Switch would be able to connect with consumers in the wider public, but products like Nintendo Labo have failed to deliver on that front.

Launched in April the Labo saw a brief rise in share price, preceding an accelerated decline.

Speaking with Bloomberg, William O'Neil & Co Inc. analyst Cornelio Ash said: "All great consoles need a great second year, and Nintendo hasn't delivered one for the Switch.

"Investors thought over five years they could sell maybe 90 million units. But after this year, that's looking pretty much impossible."

The strength of Nintendo has always come from its first party line-up, and the platform holder has announced a new Animal Crossing game, new Metroid, and a new core Pokémon RPG.

Additionally, Super Smash Bros. Ultimate has become the best pre-selling game on Switch.

However, none of these titles are likely to appeal to the wider non-gaming audience that Nintendo needs to capture in order to replicate the long-term success of the Wii.

Wedbush Securities analyst Michael Pachter suggested that a 33% price cut would be necessary to spur sales growth.

"I don't see sales growing unless the price is reduced to below $200," he said.

Nintendo has also failed to improve the situation following mixed results from its mobile efforts, with Super Mario Run failing to meet expectations, and Miitomo shutting down after two years.

The publisher 's inexperience with the platform shines through in its awkward attempts to wrestle success from the most competitive market in the industry.

Last year's Animal Crossing Pocket Camp has generated only $50 million lifetime revenue, compared to Fire Emblem Heroes which pulled in $63 million over July and August alone.

Meanwhile, new IP Dragalia Lost was simultaneously the lowest grossing launch Nintendo has ever seen on mobile, while also having the highest spend per install.

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Latest comments (3)

Jordan Lund Columnist 17 days ago
35 million instead of 38 million is still 92% of target which is not too shabby.

But the real problem is a dearth of worthwhile games. I just bought I think my 5th Switch game? Something like that? Bomberman, Street Fighter, Zelda, Octopath Traveller and Owlboy. That's nothing compared with the number of PS4 or Xbox One games I have.
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Sean Kauppinen Founder & CEO, IDEA17 days ago
I agree that the number of games is the biggest issue. There needs to be more Nintendo-specific content to push the platform. They have always been amazing with their content and I expect they will beat the current analyst estimates when their content reaches the masses - Super Smash Bros. Ultimate had the highest pre-orders of all Smash Bros. Games. Let's look back at this in a few months and see how reality plays out! I'm predicting they beat their numbers/expectations!
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Adail Antônio Pinto Júnior Infrastructure Analyst 17 days ago
The number of games is really a problem. However I believe that the price of the entire Switch ecosystem is the real problem. The console is expensive. We have smartphones with great power nowadays. Those devices can offer great games at low prices with the mobility advantages that is one of the motivations to by a Switch console and not a PS4 or a Xbox One. Another price issue is the Nintendo Store. Every little thing there is overpriced. Let's take the multiplataform indies for example. If you want to buy Sky Force Anniversary in the Nintendo Store it's about $15! It is free in the Play Store! And in the PSN Store it's less than $8! You see what I mean? Another thing that really makes me mad is the price of the retrogames. They are selling 20 years old games at $8 ! Really??? No, I mean REALLY?? They already have theirs ROI of the product for two decades! They could sell this games at $1 and it still be profit. You can ask a price a little bit higher for your exclusives but you have follow the market with the rest of the content. The Nintendo Switch is a good complementary console, but it cannot take the place of the PS4 , XboxOne or a PC to play on a TV. It lacks power and it lacks content. But as a handheld device it just need a review of it price policies.

Edited 1 times. Last edit by Adail Antônio Pinto Júnior on 29th November 2018 3:04pm

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