Nintendo Co (T:7974)., Ltd (OTC:NTDOY) has reportedly delayed the launch of 64 gigabyte (GB) game cards for the Switch system. According to a recent report from The Wall Street Journal, the company has informed developers that it expects to launch the cards in 2019 instead of second-half 2018.
Per the report, Nintendo is witnessing “technical issues” with the 64 GB cards. Currently, the Switch game cards have a capacity of 32 GB, which is not sufficient for certain titles. Moreover, rival consoles — PS4 and Xbox One — has 50-GB capacity that provides a competitive advantage to these devices.
The high capacity game cards will replace discs and improve the portability feature of the consoles, which has been a key attraction for gamers. Launched in March 2017, the console has sold 10 million units worldwide over the first nine months of availability. The company expects to sell more than 16 million units during the current fiscal, ending March 2018.
Moreover, Nintendo targets to sell around 25-30 million units of Switch Console in 2018. However, the delay in the launch of the higher capacity game card can compel some publishers to postpone data-heavy title release on the platform. This can hurt sales at least in the near term.
Shares fell 2.2% to $45.40 at close on Dec 28. Nintendo has returned 75% on a year-to-date basis, substantially outperforming 42.5% rally of its industry.
Innovative Product Portfolio to Drive Growth
We believe that Switch’s success can be attributed to Nintendo’s innovative game portfolio that includes The Legend of Zelda: Breath of the Wild, Mario Kart 8 Deluxe and Super Mario Odyssey (launched in October 2017).
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. It is the most sought-after game in the United States and Europe. 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.
Zacks Rank & Other Picks
Currently, Nintendo sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Lululemon Athletica Inc. (NASDAQ:LULU) , Michael Kors Holdings Limited (NYSE:KORS) 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 Lululemon, Michael Kors and Malibu are currently pegged at 12.4%, 7.5% and 15%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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Malibu Boats, Inc. (MBUU): Free Stock Analysis Report
lululemon athletica inc. (LULU): Free Stock Analysis Report
Michael Kors Holdings Limited (KORS): Free Stock Analysis Report
Nintendo Co. (NTDOY): Free Stock Analysis Report
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