From October, Nintendo will divide its equity in half, potentially boosting the stock as the company tries to revive the five-year-old Switch console and overcome a global chip shortage.
This year, Switch devices are estimated to sell 21 million units, down from 21.7 million last year.
The company’s Switch consoles are over five years old
Component supply and shipping concerns limited the hybrid console, which was replaced with an OLED variant last year.
Even when production and shipments return to normal, senior analyst Yasuda of Toyo Securities believes the legacy console will struggle to sustain its historical sales pace.
“Of course, the share split plan will be a boost.” I’m really stunned Nintendo announced a stock split after resisting for so long, “said Sakuma, a Libra Investments chief investment officer.
Nintendo aims to release a number of high-profile games from its own development studios this year, including new Pokémon, Splatoon, and Xenoblade Chronicles games.
“The only way Nintendo can support the surge in hardware sales is to introduce improved hardware,” Yasuda added.