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In Japan’s second fiscal quarter running from July 1 to September 30, Nintendo increased the price for the Switch 2 in the US, Canada, and Japan after an initial price hike in Japan earlier this year. Serkan Toto, CEO of Kantan Games Inc., which tracks and analyzes the Japanese game industry, expected that the price increase would lead to a decrease in sales. Despite the prediction coming true, Nintendo is assuring its investors that it would hit its forecast of 16.5 million units sold by March 31, 2027, the end of Japan’s current fiscal year.
Toto also stated, “Nintendo’s only real blockbuster this fiscal year is the Ocarina of Time remake. It’s not enough to make investors happy, especially after the device is now as expensive as it is.” The remake, set to release tomorrow, disappointed many fans, with its visuals being uncanny and overly photorealistic, instead of being true to the original art style with updated audiovisuals. The game also seems to have limited offerings to expand on the original Ocarina of Time, even missing the more difficult Master Quest mode, which many veterans were looking forward to. Overall, the remake may not generate as much excitement as Nintendo expects, with fans viewing it as more of a reskin than a release worthy of the hype. This could potentially dampen the Switch 2 sales Nintendo was hoping the remake would drive, but we will have to see how well it performs after its release.
It also doesn’t help that Macronix , one of Nintendo’s ROM chip manufacturers, recently stopped ROM chip manufacturing to focus its capacity on high-demand NOR and NAND flash chips for AI data centers, even banking on the memory price hikes for short-term gain. Currently, Nintendo is pressured to release more big games to make the Switch 2 more attractive, with new Pokémon games planned for 2027 — Who knows, maybe Nintendo might cave in and finally accept Palworld onto its platform.
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Spending on physical games falls to lowest on record since 1995
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/video-games/nintendo/SPONSORED_LINK_URL
- https://www.tomshardware.com/video-games/nintendo/nintendo-switch-2-sales-dropped-by-41-percent-from-last-year-due-to-consoles-price-increase-pressure-to-release-more-big-games-to-make-up-for-shortfall#main
- https://www.tomshardware.com/membership
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