Kimishima
Image: Nintendo

Just over a week ago Nintendo unveiled its annual financial reports, with the most notable announcement out of those days being the New Nintendo 2DS XL. Beyond that we saw that the Switch easily beat its launch sales projections - shifting 2.74 million units in March - and got a sense of Nintendo's plans for the year ahead. In summary the company was promoting cautious optimism for Switch while keeping the 3DS very much alive; its projections for net sales would also make it the company's best year in that area since the Wii was in stores.

In any case, sometimes there's the valid criticism that mentioning share value right after the financial results doesn't paint a reliable picture, as markets tend to sway like a tottering drunk in response to projections. So, a full week on, how has the Tokyo market been reacting to Nintendo's current direction as a business?

Pretty well, actually, with the share price at the end of this week - 28,355 Yen - being the highest Nintendo's stock has seen in 2017 to date, with that figure last topped in mid-December 2016. It's been a month of steady gains, and at the very least Nintendo's published results last week had a solid impact, not prompting any notable loss of confidence.

The last month of Nintendo's share value movement
Image: Bloomberg
The last year of Nintendo's share value movement
Image: Bloomberg

In general there seems to be optimism that Nintendo will beat its projections - for example the company is estimating an attach rate of just under 4 for Switch software in this financial year, but some think it'll comfortably top that. Kazunori Ito, an analyst at Morningstar Investment Services in Tokyo, said the following to Bloomberg last week.

Typically, you’ll see about 5 to 6 software titles for each hardware unit in the second year of a console. So they’re really lowballing it. As long as the big titles come out on time, we should see more software sales and that will pull up profits.

It'll be interesting to see which way things go in the coming year. We'd agree that Nintendo's Switch projections, in particular, are playing it on the safe side, but considering the challenges the company's faced in the last 4-5 years we'd suggest that's a fair approach.

If Nintendo does exceed its initial projections, as some think it will, then we could certainly be looking at a truly successful year for the company.

[source bloomberg.com]