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Nintendo’s Value Takes a Mysterious Plunge

Some speculate that today's big sell-off has to do with the company's 'Quality of Life' project.

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Despite the huge success of the Nintendo Switch, and a massive boost to the company’s stock after unveiling three new Pokémon games at a press conference last week, shares in Nintendo plummeted today to their lowest value in 18 months. No one seems to know exactly why, but some are speculating that the sell-off has to do with the possibility that Nintendo’s ‘Quality of Life’ project may be dead in the water.   

The ‘Quality of Life’ project was a decade-long plan in which the company aspired to use its integrated gaming systems to improve people’s health and wellness. The only problem: Nintendo was never clear on exactly how it would do that. In fact, the company’s primary partner on the project, Japanese electronics company Panasonic, reportedly withdrew from the partnership in March, according to a report from Nikkei, an Asia-focused business publication. 

“What is shocking is that recently there has been a lot of good news related to Nintendo,” Jefferies Group analyst Atul Goyal wrote in a report to clients, “Nevertheless if chartists are giving a diametrically opposite view, we take this as an opportunity to reassess and review.”

What Goyal is suggesting is that some light sell-off may have triggered a chain reaction of investors electing to dump their Nintendo stock. There are also a few suspicions linked to Nintendo’s allegedly disappointing showing at the upcoming Electronic Entertainment Expo, better known as E3. The company has also faced difficulties convincing consumers that their online gaming platforms will be up to snuff moving forward.

“The market is probably selling shares ahead of E3 because people are concerned Nintendo doesn’t have a pipeline that will wow investors to a point where analysts will have to raise earnings targets again,” says Amir Anvarzadeh, an advisor and strategist at a Japanese equity firm told Bloomberg.

While the unveiling of several new Pokémon games was supposed to offset the stagnation of Pokémon GO and the addition of Fortnite to the Nintendo Switch system was supposed to invite new users, many still fear that the Switch won’t be able to extend its momentum for another year.