Nintendo (NTDOY) Stock Falls On Nintendo Switch Launch Details

Shares of Nintendo NTDOY fell more nearly 6% on Friday—hitting their lowest point of 2017—following the company’s announcement of the launch details for its new Nintendo Switch console. The device will hit stores on March 3 for a starting price of $299.

2016 ended rather poorly for Nintendo, and it looks like investors are not convinced that the Switch will help turn things around. Many were surprised about the price point, as it seems the market was expecting the Switch to be priced lower than the Nintendo Wii U console, which also retails for $299.

Nintendo investors are desperate for the company to regain its console market share and win back some of the casual gamers that have abandoned consoles altogether. Less than a decade ago, Nintendo’s original Wii systems were flying off the shelves, and Nintendo had a 60% share of the console market. Today, Nintendo’s console market share is at about 25%.

Shifting consumer behavior has had a huge impact on Nintendo, which has thrived as the casual gamer’s top choice for years. However, these less-serious gamers are simply opting to get their fix through smartphone games nowadays, and that has left Nintendo reeling.

In fact, Nintendo was specifically hesitant to get into the smartphone gaming business for some time. Only recently did the company lease its Pokemon franchise to Niantic, Inc. for use in the groundbreaking augmented reality smartphone game Pokemon Go.

While investors rewarded Nintendo with skyrocketing share prices after the success of Pokemon Go, the excitement didn’t last long as interest in the game sputtered and Nintendo admitted it wouldn’t generate much revenue from the game.

Nevertheless, investors were excited to see Nintendo debut its infamous Mario character on Apple’s AAPL iTunes App Store recently. Nintendo’s “Super Mario Run” quickly climbed to the top of the iTunes charts.

Regardless, Nintendo’s focus is now on the launch of the Nintendo Switch, and the company better hope the console is a success. While investors are certainly not rewarding the stock today, several online marketplaces are reportedly already sold out of preorders, so perhaps that is an encouraging sign.

Also, don't forget to check out this week's episode of the Zacks Friday Finish Line, a news roundup style podcast featuring Zacks writers:

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