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Nintendo's share price plunged 30% in four months, wiping out twelve months of financial success linked to the Switch console, and leaving badysts puzzled.
Nintendo unscrews on the stock market. After peaking at nearly 50,000 yen (386 euros) at the end of February, the group's shares lost more than 30% of its value on the Tokyo Stock Exchange, falling to a level prior to the launch of the Switch. The title has still unscrewed 5.27% to Nikkei on Wednesday to reach some 34,500 yen, or 267 euros. This fall takes most badysts by surprise because, a priori everything is fine for Nintendo
Its Switch console, launched in March 2017, is selling well. It sold to 17 million units over a year, making us forget the fiasco of its previous Wii U product of which 13.5 million units had sold over five years. New games based on franchises of the Japanese group, such as The Legend of Zelda: Breath of the Wild or Super Mario Odyssey have also attracted critical and commercial success. These good performances are felt on his finances. By the end of its fiscal year in March 2018, Nintendo's revenue had doubled and its operating profit had increased sixfold to 178 billion yen (1.4 billion euros), compared with the previous year. 'last year.
Lack of ads and slowing demand
How to explain, therefore, this fall on the stock market? The specialists put forward several hypotheses. Some cite disappointment over Nintendo's announcements during its conference at the Electronic Entertainment Expo (E3), the world's largest video games show, which took place in June. The company has unveiled few games, most of which have already been revealed at the company's annual conference in the spring. Others evoke problems related to the online games of the firm, as the demo of the future game Mario Tennis Aces, which many players have criticized the slowness of servers. In addition, the success of Nintendo Labo, cardboard construction games complementing games on Switch, has not been as strong as expected since its launch in April, despite the enthusiasm of the press.
Finally, some blame the "chartists" those traders who are more interested in the mathematical course of the stock market than in the financial health of the companies behind it. They could have mbadively sold their shares for a quick profit taking after the revival of the Nintendo share in 2017. This is the theory of the badyst Atul Goyal, investment bank Jefferies, which was mentioned in a note published in June
The decline in investor confidence coincides with the inauguration in April of a new CEO, Shuntaro Furukawa, after three years of acting after the death of the emblematic boss Satoru Iwata in 2015. A company in mutation rivaled by mobile games, Nintendo put on portability with the Switch but also on smartphones with titles like Super Mario Run, with mixed success. Many badysts are still waiting for a rebound, as the Switch's catalog of games will be filled with new titles.
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