Nintendo stock falls due to weak earnings forecasts, development of the new Switch continues

Nintendo's stock price was hit hard by the company warning of a sharp decline in profits and suggesting the possibility that the next-generation game console Switch would not be sold until 2025, and recorded the biggest decline in the past month or more. President Shuntaro Furukawa stated via social media that Nintendo plans to release the 7-year-old Switch next year, but that announcement will not be made at the next Nintendo Direct. In response to this news, Nintendo shares fell 4.9% in the Tokyo Stock Exchange.

Prior to this, Nintendo anticipated a 19% decrease in sales and a 24% decrease in operating profit for the fiscal year ending 2025/3 to 400 billion yen, which exceeded market expectations.

Mr. Eiji Maeda, an analyst at SMBC Nikko Securities, pointed out that Mr. Furukawa's statement suggests that sales of next-generation hardware are at the earliest until 2025. He said, “The sales volume of 13.5 million Switch units, which is Nintendo's target for this fiscal year, seems difficult until next-generation consoles are released.”

According to the quarterly report for March this year, Nintendo's operating profit fell 31% to 64.5 billion yen, a sharp drop more than expected. This is despite the fact that the full-year operating income of Nintendo, which is headquartered in Kyoto, increased by 35 billion yen due to the depreciation of the yen.

Nintendo expects sales of Switch units this year to be 13.5 million units, which is a decrease from the 15.7 million units predicted last time. Software sales are also expected to decline from 200 million units to 165 million units.