[Bloomberg] Nintendo's share price is falling sharply after bad earnings results, analysts say it'll keep falling due to no new hardware on horizon

[Truno]

Nintendo Drops After Outlook Cut as Switch Demand Starts to Cool

Nintendo Co.’s stock price plunged after it cut its full-year earnings and revenue outlook in a sign of flagging demand for the aging Switch console.

www.bloomberg.com

By Takashi Mochizuki

Nintendo Co.'s stock price plunged as much as 6.9% after it cut its full-year earnings and revenue outlook in a sign of flagging demand for the aging Switch console.

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"Earnings showed the Switch is rushing to the end of its life cycle at a faster pace than what we had anticipated," said Kazunori Ito, an analyst at Morningstar. "Hardware strategy is a key for Nintendo in the next fiscal term, but it looks like it has no good measures for now."

Investors are focusing on the Switch's sales momentum in the coming fiscal year. Nintendo has sat out a broader rally in tech stocks this year and may remain stuck in the doldrums until it unveils a successor to the Switch, which has seen sales declining over the past two years. The company expects to end the year with about 18 million consoles sold, down from an earlier 19 million target.

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"Demand is exhausted" for the Switch, said Mark Chadwick, an analyst who publishes on Smartkarma, adding that the normalization of supply chain issues benefits rival Sony Group Corp.'s newer PlayStation 5.

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[5taquitos]

Dooooooooooooomed

 

[Keyser S]

Nintendo is DOOMED (again)

 

[Praedyth]

This feels a little bit hysterical, no? It's not like Nintendo gave up on new hardware, they're just waiting for the right time to drop it.

 

[Desma]

It's that time of year again

 

[RisingStar]

I mean, it is what it is. Shareholders and investors continue to piss me off on a daily growth inducing basis.

 

[ragolliangatan]

investors are stupid as fuck if they thought a console nearly 7 years into it's life was going to continue to sell as if it were earlier in its cycle. It's like they have never bothered to look at how console life cycles and sales work

 

[RochHoch]

The Switch is in such a bad shape that they just sold 20 million copies of Pokemon in like three months.

 

[808s & Villainy]

I love how it's not that demand is exhausting it's that it's exhausted. Already. When it's still the number 1/2 console in terms of sales

 

[Ausroachman]

Give it 24 hours after the direct and watch it rise

 

[UraMallas]

Time to buy.

 

[Jerm]

investors are stupid as fuck if they thought a console nearly 7 years into it's life was going to continue to sell as if it were earlier in its cycle.

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Well that's why they're moving their investments, no?

 

[ILikeFeet]

Give it 24 hours after the direct and watch it rise

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it'll fall again. buy on speculation, sell on news

 

[NESpowerhouse]

thanks for the discounted shares I guess

 

[Helix]

whoa, the shareholders are ERA members?

 

[megamanofnumbers]

I'm going to undercut any discourse about Nintendo and failure right now before it gets out of hand.

This is both good and bad. Good because this might push them to show off their new hardware sooner than later. Bad because, well, less money is bad. But good because they literally have enough money stockpiled to survive until the heat death of the universe.

 

[Chaos Legion]

investors are stupid as fuck if they thought a console nearly 7 years into it's life was going to continue to sell as if it were earlier in its cycle. It's like they have never bothered to look at how console life cycles and sales work

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They expected an announcement of new hardware by now, not for the Switch to outpace its already impressive sales.

 

[Tathanen]

Hey nice maybe I'll buy some soon.

 

[bakedpony]

$70 Zelda should make investors a bit happy

 

[Ouroboros]

I'm confused. I thought both hardware and software sales exceeded expectations?

 

[cw_sasuke]

End of an era.
MetaVR is gonna save the market.

 

[Kouriozan]

So the story of the Switch is finally exhausted then.
But with a 120M+ userbase, it'll demand a lot of effort to continue selling this well, I'm already amazed by how far it went since there was a lot of negativity around the time it was unveiled.

 

[AEF1907]

That happens if you not release a new Pokemon Ranger. Would have boosted Switch sales tremendously.

 

[diakyu]

They had a good run

 

[Bulerias]

These kind of articles will always be hilarious to me. "Switch demand starts to cool," yeah, no shit, it's what, year 6? Nintendo reported a basically record revenue and the Switch is at #3 all-time sold among consoles and handhelds. I understand that this doesn't factor neatly into stock valuations and investor reactions and whatnot, but the hyperbole has always been through the roof about Nintendo being on the brink of failure.

 

[vixolus]

mario is kill

 

[808s & Villainy]

Time to buy now guys before the stock rebounds from Zelda selling a shit ton and moving units again

 

[shadowsdarknes]

It's share price is still pretty good.

 

[Doskoi Panda]

That happens if you not release a new Pokemon Ranger. Would have boosted Switch sales tremendously.

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tell em

 

[Vidiot]

They had a good run.

 

[Keyser S]

Always Doomed

 

[LightKiosk]

whoa, the shareholders are ERA members?

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[RivalGT]

time to sell it at open

 

[Juraash]

Didn't we have an article like last week about Nintendo upping Switch production to keep up with the ongoing demand? We also have a quote here that says demand is exhausted? Which is it?

 

[BassForever]

$70 Zelda should make investors a bit happy

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Probably upset Scarlet & Violet weren't $70

 

[OnanieBomb]

Everyone with the doomed clock when this seems to just be reporting on normal market cycles

 

[--R]

Since Nintendo denied Mochizuki's Switch 2 reports, he's been biased as fuck. He's the same with PS as well. Pretty sad to see.

 

[Pirateluigi]

I'm confused. I thought both hardware and software sales exceeded expectations?

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Stock prices aren't about what already happened. They're about what shareholders think will happen in the future.

 

[CJCW?]

If this is what it takes to get a Switch 2, I'll take it

 

[EricTheGamerman]

Capitalism is literally the dumbest shit in the world and stuff like this proves it.

Oh you had the best selling console of the year, made billions of dollars across your enterprises, shipped millions in software that lit up the sales charts, and have cornered an entire subset of the gaming market with a showing that the best game companies would love to have in year four of their console, let alone five in the midst of a major period of high inflation, decreased spending, high cost of living, and general decrease in purchasing of entertainment?

Fuck you, not infinite growth, no confidence number not go up enough.

 

[NotLiquid]

Mochizuki riding high on Doomium

 

[BabyDontHurtMe]

Investor right now: It's so over.

Investors when Zelda launches: We are so back

Investors after Zelda launches: It has never been more over.

Investors when Nintendo announces the Switch successor: We have never left.

 

[megamanofnumbers]

Always Doomed

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Cool. Very nice. Now if excuse me, I have to go to the hardware store to buy enough cleaning products to entirely bleach my eyeballs clear out the back of my skull.

 

[Mr_F_Snowman]

Nov 2018 - Stock values for Nintendo have dropped back to the level they were at before the Switch first launched, many believe this doesn't spell good things for the company's future.

Senior analyst Cornelio Ash of the firm William O'Neil & Co - "The Switch excitement has rapidly declined," Ash further said. "Unless there's significant change or something else new, the Switch story has been exhausted."

Damn, these analysts and the markets in general clearly know their stuff. This guy knew the Switch story was exhausted 5 years ago! Someone should have told nintendo so they could have spared themselves from their collapse!

 

[MattB]

Perfect just bought some 👍🏽

 

[GameAddict411]

This feels a little bit hysterical, no? It's not like Nintendo gave up on new hardware, they're just waiting for the right time to drop it.

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i think it's more complicated than that. I think Nintendo is just terrified of how the public will receive a new hardware. Do they do the usual new gimmick they did in every new gen of console, or just literally update the hardware?

I can easily see them fumbling hard and fucking up the momentum that came from the switch. I mean Nintendo has a pretty wide history of this.

 

[M.Bluth]

Well, should've fired a bunch of people I guess. /s

Stock markets are dumb, shares are gonna swing back, so I guess it's a good chance for people to buy while it's down a bit.

 

[Dyle]

Doomed

I'm confused. I thought both hardware and software sales exceeded expectations?

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Yes and no. Their current forecast is still above their initial forecast but they had bumped it up a ton, 17% after Q2 and are now bringing it 7.5% down. So it's disappointing but only because they were overconfident about the holiday. They're still going to make about $3 billion in profit this year so...

 

[Yoshimitsu126]

Probably will go down even more when the new hardware is revealed

 

[Ariakon44]

Just a market overreaction, tends to happen even on the slightest of quarterly misses. They'll bounce back soon enough, most likely.