The gaming giant, Nintendo, plans to launch their long awaited new console this Friday, March 3. We will be taking a look at the Nintendo Switch, current market opinions on the new product, and how we believe it will perform in today’s highly competitive gaming market.
The key asset of the Nintendo Switch is it’s versatility. Games can be played through either a television or the portable console. This versatility is unlike any product ever launched by Nintendo or any other gaming company. The Switch allows you to bring the game with you everywhere.
The base price for the Switch is expected to be $300.00, which in comparison to the launch prices of Sony’s PS4 at $399.99 and Microsoft’s Xbox One at $499.99, is at the lower end for a gaming device. This package includes all necessary pieces, including:
- The Switch console
- One set of Joy-Con controllers
- The Nintendo Switch dock
- The Joy-Con dock
- Two wrist straps
- An HDMI cable
- The Switch AC adapter (power cord)
As you can see, the Switch is composed of quite a few pieces. Let’s quickly break down the pieces and their individual uses.
The console is used as a portable screen to take games with you on the go. The Joy-Con controllers slide easily into place for optimal use. Th console features touch screen capabilities, which are generally used for menu purposes as opposed to actual games. Battery runs for roughly three hours.
The Joy-Con controllers are truly incredible, and what make the Switch so versatile. The controllers can easily slide in and out of the console or Joy-Con grip, and can also be used without being connected. In addition, both the left and right controller have the ability to be used individually for optimal split screen play.
The Switch dock is used as both a charging station for the console and to connect to a larger monitor/TV. The console can slide into the dock with out any difficulty.
Lastly, the Joy-Con grip is used to connect the Joy-Con controllers for standard gaming. This is piece is one of the weaker aspects of the system, as it creates a square controller, which is not great for dexterity.
Expected Market Performance
In recent months, Nintendo (NTDOY) stock prices have fell as many investors have been discouraged by the high product price, even when compared to other gaming systems. The key difference between the Nintendo Switch and other systems like the Xbox One or PS4 is target audience. Nintendo has a much younger audience focus, as key games include child friendly Super Mario, Mario Kart, and The Legend of Zelda. The younger market is one primary reason why analysts believe that launch price may be too high, as consumers may be more sensitive to high pricing. Additionally, many investors are concerned with the lack of production of the Switch and believe that scarcity of the product during launch may negatively impact sales.
I am personally optimistic about sales for the Switch, and believe that this groundbreaking product will become increasingly successful over the upcoming year. Over the course of Nintendo’s history, the stock has seen three major price jumps. All three jumps came in result of a new product launch. The largest of the three occurred in late 2006 when the Nintendo Wii was released to stores. The other two jumps were caused by the launch of Nintendo’s Wii U and Pokemon Go. Based on this history, I expect the trend to occur and for Nintendo to see a huge jump in stock price as the Switch takes off. Something to be aware of though is that every time Nintendo has seen this stock price jump, the stock has fallen close to previous prices after a small peak period.