Nintendo will struggle to escape COVID-19 woes

Following today’s earnings results for Nintendo;

Rupantar Guha, Senior Analyst for Thematic Research at GlobalData, a leading data and analytics company, offers his view:

“While Nintendo’s results for the three months to the end of March were good, its outlook is uncertain because of delays to software development and console production. This uncertainty is reflected in its position in the middle of GlobalData’s gaming software thematic scorecard, which places it behind leading companies such as Tencent, Epic Games and Activision Blizzard.

 

“Nintendo ranks 17^th out of 38 companies in the scorecard, with a rating of only two out of five for the company’s ability to cope with the challenges brought by COVID-19. This rating suggests that the virus is expected to have a negative impact on the company’s earnings over the next 12 months. Nintendo is facing production issues for its Switch consoles that have forced it to halt domestic shipments. The supply of components from China to production units in Japan and Vietnam has also been disrupted by COVID-19.

 

“Nintendo expects to sell 19 million Switch console units between April 2020 and March 2021. This guidance is conservative given the rising market demand and reflects the company’s inability to predict with any degree of confidence when production will be back on track.”

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