Shares of Nintendo (NTDOY) in the U.S. are set to open lower after falling in Japan as investors were left underwhelmed by the company’s announcement of the successor to its Switch console.
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The stock fell as much as 7% at one point overnight as investors reacted to a lack of specifics about the Switch 2 console, which looks to be more of refresh of the original than a brand-new design.
Having hit a record high ahead of the announcement, in Tokyo the stock finished down 4.3% for its worst daily drop since September.
New Nintendo Switch Trailer Disappoints
Clearly, investors were underwhelmed by news of the successor to the almost eight-year-old Switch, with Nintendo failing to provide a price, launch date or specifications.
But the company did say more information would be coming in April and that Switch 2 would come with exclusive games.
On Thursday, January 16th, the company teased the new hybrid console with a short video trailer, which indicated the updated version of the console looks almost identical to the old one but also comes with USB-C ports at the top and bottom of the console, a redesigned kickstand, a slightly larger screen, and the updated JoyCon controllers snapping rather than sliding on to the side of the device.
Nintendo has been struggling to maintain earnings growth without a new console. In November the firm cut guidance for Switch sales for the Fiscal year ending in March after lackluster first-half sales.
Indeed the industry as a whole is struggling to maintain momentum. After booming during the COVID-19 pandemic, gaming sales are now tailing off.
Is NTDOY Stock a Buy, Sell, or Hold?
Just one analyst has covered NTDOY over the last three months. Jefferies analyst Atul Goyal has a Buy rating and a $17.20 price target for NTDOY shares, representing a potential 10% upside.
