REUTERS-Nintendo Co
Ltd on Friday priced its first console in about four years above market
expectations, disappointing investors and clouding its prospects of
winning
back gamers who have shifted from consoles to smartphones.
The Japanese
firm said it will launch the Switch, a hybrid home console and handheld device,
on March 3. It will be priced $299.99 in the United States, the same as Nintendo's
current Wii U console, whereas in Japan, it will cost about 20 percent over its
predecessor at 29,980 yen.
Nintendo,
which began by making playing cards in the late 19th century, is counting on
the Switch to revive its earnings which rely heavily on console sales.
But the
pricing left Nintendo shares ending at a two month low after falling as much as
6.3 percent. That compared with a 0.8 percent gain in the benchmark Nikkei 225
share price index.
"Pricing
at around 25,000 yen would have been received well but the pricing is on the
high side," said Fumio Matsumoto, senior fund manager at Dalton Capital in
Japan.
"The
machine can be used both as a home console and handheld device so the higher
price is understandable to some extent, but there aren't really enough software
titles to justify that start price," he said.
Nintendo's Wii
console, which debuted in 2006, captured casual gamers with popular fitness and
sports features, propelling the firm's profit to record highs.
But the
succeeding Wii U flopped due to a dearth of popular game titles and a consumer
migration to smartphone games, pushing the company into a loss for three
consecutive years through March 2014.
The company
finally entered mobile gaming last year by bringing its Super Mario Bros
franchise to Apple Inc's iPhones, but it still sees console gaming as central
to its business.
Analysts said
the Switch is likely to offer a richer game lineup than its predecessor as the
new console is powered by processor chips based on game developer-friendly
architecture by designer ARM.
Nintendo said
more than 50 game software makers are developing 80 titles for the Switch. Of
those, eight will be available at the time of launch in Japan, including
"The Legend of Zelda: Breath of the Wild."
But some
industry watchers are cautious about potential difficulties for developers.
"It is a
console with a complicated controller setup and that means game makers have to
create titles to fit with that, which is a problem," said Kenji Ono, an
independent gaming journalist.
"Also it
is unclear how it connects with online gaming and there was no announcement of
how it links up with (smartphone games) Pokemon Go or Super Mario Run."
Nintendo
previously said it expects to ship 2 million Switch consoles by the end of
March.
REUTERS
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