Nintendo's Switch Surpasses Wii's Record Sales, Shares Up

Nintendo Co (T:7974)., Ltd. (OTC:NTDOY) has sold 4.8 million of its Switch console system in the last 10 months, outshining Wii’s sales record of more than 4 million units.

Nintendo’s shares rallied 3.40% to close at $48.53 on Jan 4, 2018. Apart from robust Switch sales, rumors about the launch of Pokemon Go in China drove share price.

Strong Demand for Games Drives Unit Sales

Switch is now the fastest-selling home video game system in the United States, primarily driven by a robust portfolio which includes the likes of Super Mario Odyssey, The Legend of Zelda: Breath of the Wild, Mario Kart 8 Deluxe and Splatoon 2.

Nintendo stated that in the United States, more than 60% of Switch owners have Super Mario Odyssey and over 55% own The Legend of Zelda: Breath of the Wild. Roughly 50% and 20% Switch owners possess Mario Kart 8 Deluxe and Splatoon 2, respectively.

The Legend of Zelda: Breath of the Wild is the top-selling game on the Switch platform, having sold around 4.7 million units as of Sep 30, 2017. Market research firm NPD placed the game at #15 in its top 20 selling games by revenues list for the month of November.

Nintendo’s Splatoon 2 game is considered the “most impressive performer” in Japan. Mario Kart 8 Deluxe, launched in April, continues to enjoy high demand globally. Further, NPD placed Super Mario Odyssey at #6 in its top 20 selling games list for the month of November.

Robust Projections

Nintendo expects to sell more than 16 million units during the current fiscal, ending March 2018. Moreover, the company targets to sell around 25-30 million units of Switch Console in calendar 2018.

Nintendo has a strong pipeline of new launches on the Switch platform. Games like Kirby Star Allies, Bayonetta and Bayonetta 2 are expected to drive unit sales volume. Moreover, continuing support from major third-party publishers like EA, Activision, Ubisoft, Capcom, SEGA, Take 2 and Bethesda are also noteworthy.

Pokemon Go’s China Launch: Key Catalyst

Per sources, Nintendo is set to launch the popular augmented reality game Pokemon Go in China, the world’s largest gaming market. Per Bloomberg, which quoted market research firm Newzoo, China’s gaming market was worth $32.5 billion in 2017, compared with $25.4 billion in the United States and $14 billion in Japan.

Although Nintendo is expected to face strict regulation in the Chinese market, a possible launch will boost sales significantly in the long run.

Zacks Rank & Other Stocks

Currently, Nintendo sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Michael Kors Holdings Limited (NYSE:KORS) , Tailored Brands (NYSE:TLRD) and Malibu Boats, Inc. (NASDAQ:MBUU) are stocks worth considering in the broader consumer discretionary sector. All the three stocks have the same Zacks Rank as of Nintendo.

Long-term earnings growth for Michael Kors, Tailored Brands and Malibu are currently pegged at 7.5%, 16.5% and 15%, respectively.

Zacks Editor-in-Chief Goes "All In" on This Stock

Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.

Download it free >>