Traders are sending signals that Nintendo Co.’s newest console Switch may be on its way to becoming a bigger hit than the Wii, the company’s best-selling home console of all-time.
Since the Switch went on sale on March 3, the Kyoto-based game maker outperformed the broader Japanese stock market by 20 percentage points through Thursday. That’s more than double the 8.9 percentage point outperformance during an equal time period that followed the Wii launch in 2006. It’s also far ahead of the nearly 30 point lag shares suffered in 2012 after the disastrous launch of the Wii U, which went on to become Nintendo’s s worst-selling home console in history.
The strong performance has come despite criticism of the Switch’s small software lineup and reports of hardware issues, such as the console physically bending after continued use and poor reception with its controllers. Others have bemoaned the difficulty in finding a unit even a month after launch.
The company’s long-history of conservative production targets has some analysts worried. Jefferies Group analyst Atul Goyal estimated that 2.5 to 3 million Switch units were sold in March, ahead of Nintendo’s target of 2 million. But he warned the company could disappoint on April 27 when it announces sales forecasts for the fiscal year through March 2018.
“Nintendo’s guidance of Switch volumes and OP (operating profit) numbers could very well underwhelm the market,” Goyal wrote in a report to clients this week.
Limited supply has driven up prices on some auction sites. On eBay, the Switch goes for an average price of $450 per unit, a 50 percent markup to the retail price. In Japan, premiums range from from 15 to 40 percent on Yahoo Japan Corp., operator of the country’s main auction site.
Here’s a quick look at Switch sales estimates for the fiscal year through March 2018:
5 million Jefferies (April 5)
6.5 million Bank of America (March 23)
7.5 million SMBC Nikko (April 6)
10 million Mizuho (March 21)
13 to 16 million Ace Institute Research (March 21)