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.
"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.
"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.