Shares of Japan's Nintendo Co. video game developer fell following reports that the company was delaying the release of its Switch replacement until 2025, according to Bloomberg. On Monday, the shares saw their largest intraday decline since October 2021, fell as much as 8.8 per cent in Tokyo. The Kyoto-based company informed its game publishing partners that the next-generation video game console will not be released in the last quarter of this year, but rather in the early months of 2025, according to Bloomberg. Nintendo advised its partners not to anticipate the as-yet-unannounced system until at least March 2025. After driving the stock to an all-time high last week on hopes that the company would replace the seven-year-old Switch with a new device in 2024, investors may sell off more Nintendo shares. "There seem to be a lot of new buyers of Nintendo who may be less familiar with the name and more impatient for the company to put up visible numbers," Mio Kato of LightStream Research stated. "Nintendo's numbers for the March 2025 fiscal year could start to look rather ugly if key software is delayed at the same time that the current hardware has aged so much." He added. To make matters worse, Nintendo is reportedly saving its upcoming lineup of blockbuster games for next-generation hardware. Although the company's most profitable division is software, video game developer consultant Serkan Toto of Tokyo believes it is unlikely to release new games in its biggest franchises, Legend of Zelda, Mario, and Splatoon, before the upgrade. Following Nintendo's earnings release this month, President Shuntaro Furukawa sidestepped questions regarding upcoming hardware, stating that the company will reveal its plans for the upcoming fiscal year following the end of the current one. 139 million of the current console have already been sold, he continued, adding that it will be difficult to sell more of them. If Nintendo doesn't release a Switch 2 by the holidays, it will have to compete with far more capable and much newer consoles from Microsoft Corp. and Sony Group Corp. Nevertheless, according to Bernstein analyst Robin Zhu, some investors might view additional drops in Nintendo's share price as a chance to purchase the stock at a discount. In the next six months, he anticipates an announcement regarding the new hardware.
