Nintendo shares slumped Friday as investors were left disappointed by the high-end starting price of its much-awaited next-generation gaming system, Switch, which will go on sale globally on March 3.
The Switch will be priced at $299.99 in North America and 29,980 yen in Japan, Tatsumi Kimishima, president of the Japanese gaming giant, told reporters at an event on Friday. He did not specify a standard price for the European market.
Nintendo shares tumbled 5.75 percent to 23,750 yen at the close of trade, and commentators said the higher than expected retail price of the console fanned concerns over the product’s viability. Given the fierce competition in the console market, pricing is a key factor for the success of the Nintendo Switch, Jefferies analyst Atul Goyal told CNBC’s ” Squawk Box ” on Friday before the announcement.
Goyal had expected a retail price of $250. Though the Switch costs about $50 more than what the market expected, the Switch’s pricing is in line with its competitors. The Sony PS4’s starting price is also $299.99, while Microsoft ‘s Xbox One starts at $249.
Other factors were at play as well for the stock slump.
Seth Fischer, founder and CIO at Hong Kong-based Oasis Management, told CNBC’s ” Capital Connection ” that it was likely a case of “buy(ing) the rumor, sell(ing) the fact” and that investors were still likely interested in the stock.
Switch is a hybrid gaming system that is part gaming console, part handheld device and part tablet.
It allows users three different styles of play: first, they can set the Switch console in a dock and connect it to their television sets for the more traditional type of TV mode gaming.
