Sony And Nintendo Had A Bumpy Day On The Stock Market!

It was a bad start to the week for both companies as their stock prices fell significantly.


Following rumors that the successor to the Nintendo Switch might not be released until early 2025, the Tokyo Stock Exchange saw the Big N’s shares close in the red. Initially, we saw an 8.8% drop, but in the end their value plummeted by 5.8%. The previous week, when the market seemed hopeful on the news of a successor to the Switch, the stock had risen to a record high of 8874 yen ($59), but this has now fallen to 8410 ($46). Although this is still a high for Nintendo, it could be described as a fall.

Kato Mio, an analyst at LightStream Research, says the decline could continue if Nintendo does indeed hold off on a successor to the Switch until 2025, while also somewhat neglecting its game offerings in 2024. Kato says there is a growing number of new stock buyers who are not very familiar with Nintendo and are impatient for the company to release visible numbers. The next fiscal year could get off to a bad start if games are delayed, as time is slowly running out on the current hardware, the Nintendo Switch (it will be 7 years old in March). And Bernstein analyst Robin Zhu urges calm: he thinks the downturn is a good time for investors to buy the stock, as the next-generation hardware could be announced in March.

Sony has also seen a decline after forecasting only 21 million PlayStation 5 shipments to stores in the fiscal year to the end of March, instead of 25 million. It was down 8.4% and ended the day down 6.5%. The decline was also driven by a drop in operating margin for Sony’s video game division to 6% from 9% a year ago (it was 12-13% in the last quarter of 2021). CNBC calculated based on FactSet data and estimated that the decline wiped out about $10 billion of Sony’s value.

Jefferies equity analyst Atul Goyal said the PlayStation 5 guidance cut was not as negative as the low operating margin. It’s been 12-13% for four years, and 6% is a big disappointment because it hasn’t been that low in about a decade. He thinks it should have been around 20% because of digital game sales and PlayStation Plus (where margins are around 50%).

For both companies, this year will be somewhat subdued.

Source: VGC, VGC, Bloomberg, CNBC

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Anikó, our news editor and communication manager, is more interested in the business side of the gaming industry. She worked at banks, and she has a vast knowledge of business life. Still, she likes puzzle and story-oriented games, like Sherlock Holmes: Crimes & Punishments, which is her favourite title. She also played The Sims 3, but after accidentally killing a whole sim family, swore not to play it again. (For our office address, email and phone number check out our IMPRESSUM)

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