High-end starting price of Nintendo Switch left investors disappointed.

Nintendo shares

Nintendo shares dropped as investors were left disappointed by the high-end starting price of its much-awaited next-generation gaming system, the Switch, which will be released globally on March 3.

Tatsumi Kimishima, president of the gaming giant, told reporters at an event that the Switch will be priced at $299.99 in North America and 29,980 yen in Japan. He did not specify a standard price for the European market.

Nintendo shares slumped 5.75 percent to 23,750 yen at the close of trade, and commentators said the higher than expected retail price of the console increased 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.

The expected price for the Nintendo Switch was $250. Though the switch costs about $50 more than what the market expected, the Switch 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.

Switch is a hybrid gaming system that is part gaming console, part handheld device and part tablet.

It has 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. They can stand the console up with a kickstand and play using the Joy-Con controllers in the Tabletop mode. The Joy-Con controllers can also be attached on either side of the console for the handheld mode.

Nintendo has struggled in the gaming console market, following a disappointing run of its Wii U console, which sold only about 13.36 million units as of September 2016 since its launch in late 2012. In contrast, its predecessor, the Nintendo Wii, sold 101.63 million units as of September last year following its launch in 2006.

Nintendo's biggest competitive advantages are the vast intellectual property it possesses. The titles available for the Switch, along with the console’s functionality, could make it a big hit among gamers.


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