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Nintendo Investor Panic May Inflate NX Price

The Nintendo NX – the Japanese gaming giant’s new console, expected to be officially unveiled by the end of this week – could retail at a higher price due to low market confidence. Credit rating agency Macquarie, which broke the news of the NX unveiling last week, has downgraded Nintendo’s share rating from ‘Outperform’ to ‘Neutral,’ suggesting that it does not expect the company to perform well in the coming months. The change seems to have been motivated by Nintendo’s decision to price the NX at a comparable level to the PS4 and Xbox One which, even at its lowest, would see the console retail for around $300/£250, despite the NX reportedly being less powerful than its Sony and Microsoft rivals.

According to the report by Macquarie (via Seeking Alpha):

  • Running against a general recent bullish tide, Macquarie has downgraded Nintendo (OTCPK:NTDOY) to Neutral, from its previous Outperform rating.
  • A long-in-the-works revamp to the company’s consoles — the NX, with reveal coming next week — is liable to come at a price that will result in a “major” disappointment for volume sales, the firm says.
  • Speculation is putting the price of the new console between $300 and $350, in line with competing consoles, vs. the Wii’s former discount to rival boxes from Sony and Microsoft.
  • The company’s move into mobile gaming, Super Mario Run, has a missed opportunity as well, Macquarie says: Being only iOS and ex-China, it’s missing 60% of the market.
  • The firm cut its price target on Nintendo to ¥25,900 from a previous ¥27,300, implying some fractional downside from today’s closing price of ¥26,075.
Ashley Allen

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