Nintendo stock in its biggest slump in over 2 years
Nintendo's stock is down. With the struggles of the Wii U, did anyone not see that coming? After being excluded from the Nikkei 225 Stock Average, the result is the biggest slump for Nintendo's stock in more than two years, Bloomberg reports. Shares are down to 10, 860 yen in Tokyo, down 8.4 percent.
Nintendo recently cut the price of its Wii U console in the United States, with big titles getting ready to release and right before new consoles launch from Sony and Microsoft. Jay Defibaugh, an analyst at CLSA in Tokyo, said that "The early signs of key first-party software inducing a major turnaround in Wii U console fundamentals are not promising, and the outlook for third-party support is grim. The value of iconic Nintendo franchises may be declining as younger generations discover gaming through mobile devices."
Takao Suzuki, an analyst at BNP Paribas SA in Tokyo, said in a referenced report, "We believe Nintendo's shares have been overvalued due to speculative demand, on the assumption that they would be included in the Nikkei. As this expectation has come to nothing, this appears to be the right time to sell."
Nintendo recently transferred its listing from Osaka to Tokyo, which made its stock eligible for the Nikkei. A review of membership in the Nikkei 225 is held once a year in autumn and implemented in October.
Hopefully some big titles on the way for the Wii U turns things around, but Nintendo is swimming in money. They can afford a bad period of time. Still, let's hope things get better soon.