Nintendo shares drop after disappointing Switch Lite sales

Nintendo Co. fell the most in nearly eight months after a weaker-than-expected debut of its Switch Lite in Japan, a sign of potential difficulty in broadening the customer base for its lineup of portable game consoles.

The shares closed 4.3% lower, the biggest drop since Feb. 6. Bloomberg News reported Tuesday that Nintendo sold 114,192 units of the Switch Lite in the period Sept. 20-22, according to preliminary figures from Media Create. The digital entertainment researcher on Wednesday put the final sales numbers at 160,768 units. That’s just over half the 300,000 units forecast by Citigroup and JPMorgan Chase & Co.

“The initial impression is negative,” Citi analysts Minami Munakata and Yui Shoji said in a research note responding to the initial sales report. “Casual gamers that could be drawn to the new console are unlikely to rush to buy the console immediately after its launch.”

The Kyoto-based company, known for iconic game franchises like Mario and Zelda, has been experimenting with new hardware and software products as the rising popularity of smartphones hits the traditional market for gamers playing on consoles.

A smartphone version of the popular Mario Kart series will launch later today, marking another debut that will be closely tracked by investors.

Even with today’s share drop, Nintendo’s stock is up almost 40% this year on expectations that a strong game lineup will drive hardware sales. The launch slate includes a new instalment in the Zelda saga along with Luigi’s Mansion and two Pokemon games.

The company also released details of its new Ring Fit Adventure fitness game and its accompanying Ring-Con and Leg Strap accessories that will go on sale next month.

Mario Kart Tour is scheduled to launch around 5 p.m. Tokyo time on Wednesday. The game, which can be downloaded but not yet played, has already topped the iPhone’s App Store ranking for free games in Japan.

Nintendo earlier this summer conducted a closed beta for the game on Android. Mario Kart 8 Deluxe is the company’s most popular game on the Switch with almost 18 million units sold. The franchise also topped software rankings for the predecessor Wii U and handheld Nintendo 3DS.

Now read: Nintendo experiments with bendable Switch controller

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Nintendo shares drop after disappointing Switch Lite sales