Monday, 6 November 2017

Why the Switch was the hit Nintendo needed for its turnaround.

It’s official: Nintendo (NTDOY) is back.

Turnaround stories are few and far between in the brisk-paced world of technology, but the Japanese gaming company’s most recent earnings solidified it as the industry’s latest “comeback kid,” driven by robust sales of the Switch.  

Nintendo revealed this week that it sold 2.9 million Switch consoles in its most recent quarter, bringing the total number of consoles sold so far to 7.6 million units. The company also sold 22 million Switch games during the last six months. Nintendo’s stock is up over 80% year-to-date.

‘It emulates a tablet more than the Wii U did’
Wedbush Securities analyst Michael Pachter, who estimates the Switch will now sell 75 million units during its lifetime, admits the Switch surpassed his initial expectations, in part because it succeeds where Nintendo’s previous console, the Wii U, failed.

“The Switch is actually pretty fun: a bigger than normal handheld, and when on one’s lap, the screen is actually quite large,” Pachter said. “It emulates a tablet more than the Wii U did.”

A Frankenstein-like marriage of tablet and home console features, the Wii U sold just 13.5 million units during its four-year lifespan. The device was criticized for being severely underpowered, confusingly named and gimmicky. Its biggest failing? A controller with a tablet-like large screen you could play games on. But if you moved it more than a few yards away from the console, you lost the signal, and the controller became a worthless chunk of plastic. As a result, the Wii U’s poor sales contributed to significant losses for Nintendo in more recent years.

By JP Mangalindan.

Full story at Yahoo News.

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