Nintendo is a giant that needs no introduction. However, it has recently faced a difficult period, with a drastic decline in sales of the Switch platform that has severely affected the company's profits.
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Rumors suggest that this gradual abandonment is actually motivated by the preparation of a major turning point, which will have an impact on Nintendo's future strategies and market shares.
Nintendo's sales
La Switch platform has been on the market since 2015 and has seen a sharp decline in sales in recent years compared to the early years, indicating a significant decline in consumer interest. Despite all this, the company continues to issue forecasts that are anything but negative.
The optimism about the annual targets, which have been missed for two consecutive years, seems to be poorly supported by the actual sales data and especially by the ever-increasing requests for an update to a possible Switch 2 platform. After eight years, in fact, the hardware components are now obsolete and the novelty effect has already faded. In short, we are at a time when even potential interested buyers expect something new.
Nintendo Profits: Consoles and Intellectual Property
The latest economic data speak of a quarterly decline of 71% that leaves one astonished. We are still well over 300 million euros, but with a performance below expectations, which reflects the contingent difficulties of the Japanese giant.
In addition to console sales and Technological games always wanted, there are revenues from intellectual properties, which are also down. The sector has brought in less than 100 million euros, despite the boom following the release of the film “Super Mario Bros.” which was a notable success.
The economic impact of these trends has been felt: investors and analysts are starting to worry and take the indicators as a worrying signal. Will Nintendo's strategies not be enough to maintain market share, or will Japan come up with a new ace up its sleeve?
Nintendo Under Pressure: Will It Accept the Challenge?
According to Serkan Toto, founder of the giant Kantan, Nintendo's forecasts are simply excessive and should be revised downwards for the rest of 2024, as the company would not be ready to face a real turning point in the future. However, the pressure is not felt only by Nintendo, but by the entire sector.
Rising costs and downward price hikes are challenges that have also brought competitors to their knees, developers like Sony's Bungie, forced to cut jobs to bow to the same economic pressures. Thus, Nintendo's numbers must be reread in the broader context of a global downsizing of the portable gaming platform sector.
Meanwhile, expectations are also growing for the arrival of the new platform, with open sites to explore and propose the features that arouse the most interest. An invitation from aficionados, who want a good reason to return to purchase?
Upcoming projects and titles
The general decline is not uniform, however: there are titles that continue to bring in more than well. Among the favorites for Nintendo Switch, there are games like “Mario Kart” now in its eighth edition, always a big seller, or like Animal Crossing, which has never stopped being a passion.
An expansion of acclaimed success is “The Legend of Zelda: Breath of the Wild” which introduced innovative game modes. “Super Smash Bros. Ultimate” also, riding the renewed popularity brought by the film, revived exciting battles.
Only the most devoted gamers go beyond these best-selling titles, while most repeat the missions of “The Legend of Zelda” or even take advantage of the platform to find casino with free admission. But Nintendo seems to have a lot of recipes in the works.
An update of “Mario & Luigi: Brothership” is expected to be released by the end of the year, and the company is preparing to invest in another film in the wake of “Super Mario,” which is expected to be released in 2026. In short, the strategy is to expand the image offering on the big screen to compensate and counteract the decline in physical sales of the platform.
Will these new releases and this new strategy succeed in giving Nintendo back its power? Will the time for the fateful renewal of the Switch come, with new projects? The success of Nintendo's initiative will depend a lot on the trajectory of the market and the results of the moves in the coming months.
The Stock Market and Nintendo Performance
How has the market reacted to Nintendo's latest developments? The stock was already down 2,3% on average even before the announcement of the last quarter's numbers. However, after the reports were released, there was a rebound of 7,6%. Why? It clearly reflects the expectations of investors, who welcome Nintendo's optimism.
The positive reactions of the last few months are an important indicator of market expectations. The company should be able to face and overcome the current pressures with very influential projects with a sure impact. At least according to the stock market trends.
Physiological decline and change of strategy
Nintendo is facing a physiological decline due to the global trend of the sector and the constant aging of the Switch platform, which seems destined to be renewed soon. The financial results were nevertheless well received by the market, which expects a relaunch in the coming months, also thanks to the announcement of a renewed expansion strategy in the film industry.
While the gaming community awaits new titles and perhaps the final announcement of the launch of the Switch 2, Nintendo seems to have everything under control and even wants to consolidate its position among its competitors.
Article published on 24 October 2024 - 12:02
