Nintendo NX: High Price Tag Could Disappoint Volume Sales

Nintendo NX: High Price Tag Could Disappoint Volume Sales
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Nintendo is expected to unveil its next-gen gaming console sometime later this month. Excitement for the Nintendo NX is hitting the peak. However, its price tag could be a major disappointment for volume sales. In a recent research note, analysts at Macquarie downgraded Nintendo stock from Outperform to Neutral. It means they don’t expect the stock to perform well in the near term.

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Nintendo NX sales could be weaker than expected

Macquarie said Nintendo NX sales would be weaker than expected due to its rumored price range of $300-$350. If the rumors are true, the NX price could be similar to competing products from Sony and Microsoft. Last month, the console was listed on British retailer Tesco’s website with a price tag of £349. However, the listing was taken down quickly, indicating that the price was just a placeholder.

Nintendo’s previous consoles such as the DS and Wii were able to gain traction thanks to their $150 and $250 price tag. Analysts believe that Nintendo NX needs to be cheaper than Microsoft’s Xbox One S and Sony’s PS Pro in order to succeed at launch. Industry expert Michael Pachter has said that Nintendo NX won’t be able to garner developer support outside of Japan.

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Nintendo to unveil NX before Oct.26

Macquarie also took a pessimistic view on Nintendo’s decision to not release Super Mario Run in China and limit it to iOS devices. By doing so, Nintendo is missing 60% of the market, said the research firm. Macquarie has slashed its price target on Nintendo from 27,300 yen to 25,900 yen.

There have been rumors that the NX could be unveiled on Friday, October 21 during a Nintendo Direct event. However, reports that the unveiling has been pushed back to next week. In any case, the Japanese company will have to talk about the console at its investor briefing on October 26. It makes sense for the company to unveil NX before that, so that investors can get a fair idea of how it will be received in the market.

Nintendo NX to adopt social media in a big way

Nintendo has confirmed that the console will go on sale in March 2017. The demo units are said to be made available to retailers by February. It will give consumers sufficient time to get familiar with Nintendo NX before purchasing. Some of the titles arriving with the console include Just Dance 2017 and The Legend of Zelda: Breath of the Wild. 

Nintendo NX is said to be a hybrid console that can be connected to a TV or used on the go. Lately, gaming executives have been praising the console for its innovative features. It will have a social share button to let you upload and stream gameplay to Facebook, YouTube, and Twitter. The NX is also rumored to be region-free, unlike the company’s previous consoles that came with region-locking.

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