Tech

Nintendo Switch to launch globally on March 3, to cost $300 in the US

Nintendo shares slumped Friday as investors were left disappointed by the high-end starting price of its much-awaited next-generation gaming system, Switch, which will go on sale globally on March 3.

The Switch will be priced at $299.99 in North America and 29,980 yen in Japan, Tatsumi Kimishima, president of the Japanese gaming giant, told reporters at an event on Friday. He did not specify a standard price for the European market.

Source: Nintendo

Nintendo shares tumbled 5.75 percent to 23,750 yen at the close of trade, and commentators said the higher than expected retail price of the console fanned concerns over the product's viability. Given the fierce competition in the console market, pricing is a key factor for the success of the Nintendo Switch, Jefferies analyst Atul Goyal told CNBC's "Squawk Box" on Friday before the announcement.

Goyal had expected a retail price of $250. Though the Switch costs about $50 more than what the market expected, the Switch's pricing is in line with its competitors. The Sony PS4's starting price is also $299.99, while Microsoft's Xbox One starts at $249.

Other factors were at play as well for the stock slump.

Seth Fischer, founder and CIO at Hong Kong-based Oasis Management, told CNBC's "Capital Connection" that it was likely a case of "buy(ing) the rumor, sell(ing) the fact" and that investors were still likely interested in the stock.


Nintendo Switch looks very exciting: Investor
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Nintendo Switch looks very exciting: Investor

Switch is a hybrid gaming system that is part gaming console, part handheld device and part tablet.

It allows users three different styles of play: first, they can set the Switch console in a dock and connect it to their television sets for the more traditional type of TV mode gaming. They can stand the console up with a kickstand and play using the Joy-Con controllers in the Tabletop mode. The Joy-Con controllers can also be attached on either side of the console for the handheld mode.

When Nintendo initially announced Switch - previously called the NX - there was a lot of buzz around the so-called Joy-Con controllers, which can be split into two separate gaming controllers. They come with motion control sensors, including an infrared camera on the right Joy-con that can sense the shape, motion and distance of objects before the controller.

This opens the possibility of a new form of player-versus-player gaming as Nintendo demonstrated with two new game titles 1,2 Switch and Arms. In 1,2 Switch, players take control of each Joy-Con controller and can play out scenarios like quick draw shooting and sword fighting without needing to look at the screen, with their movements determined by the motion control features in the controller.

The Joy-Con controllers also come with wrist straps that make the grip easier and are available in black, red and blue.

The Switch's battery life varies on the games, but Nintendo said it could be expected to last in a range between 2.5 to 6.5 hours. The console can be charged using a USB-C charger.

Nintendo has struggled in the gaming console market, following a disappointing run of its Wii U console, which sold only about 13.36 million units as of September 2016 since its launch in late 2012. In contrast, its predecessor, the Nintendo Wii, sold 101.63 million units as of September last year following its launch in 2006.

Nintendo Switch has 50% chance of succeeding: Analyst
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Nintendo Switch has 50% chance of succeeding: Analyst

In the mobile gaming space, which the Japanese company entered as late as 2015 with a partnership with DeNA, Nintendo found success in 2016, first with the successful launch of the Niantic-developed Pokemon Go mobile game. That was followed by Nintendo's in-house developed Super Mario Run game that was rolled out on the iOS platform last December and garnered about 40 million downloads in 4 days.

Analysts have previously said that one of Nintendo's biggest competitive advantages is the vast intellectual property it possesses. Fischer agreed that titles available on the Switch, along with the console's functionality, could make it a big hit among gamers.

At the Tokyo event, Nintendo announced there were 80 games in development for the Nintendo Switch from over 50 companies.

Among the notable names showcased were Splatoon 2 and Super Mario Odyssey, which is set to be released during the holiday season later in the year, and role-playing game titles such as Xenoblade Chronicle 2, The Legend of Zelda: Breath of the Wild - launching on Mar. 3 - and a tease for Fire Emblem Warriors.

Third party games such as Bethesda's Skyrim and EA Sports' FIFA will also be available.

Nintendo also announced an online, paid subscription service for the Switch, with pricing details set to be announced later. Some analysts felt Nintendo's move into a subscription service was a little late.

Serkan Toto, CEO of Japanese gaming consultant Kantan Games said, "Microsoft and Sony have had this for years...they were giving away free games on a monthly basis for years."

— CNBC's Arjun Kharpal contributed to this report.

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