Nintendo's stock is plummeting! Lack of Online Infrastructure partially to blame?

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Published on June 5, 2018 8:43:15 PM ● Video Link: https://www.youtube.com/watch?v=cDexfwA4AnA

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Super Smash Bros. Ultimate (2018)

Duration: 6:26

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Nintendo's share value had sunk drastically amid reports that the 'Quality of Life' project had been scrapped and Panasonic had left. However, the two-day drop - LARGEST drop that the Nintendo stock has experienced in 18 months - is related to a lack of confidence from investors pertaining to the Nintendo Switch Online Service coming fall of 2018.

According to Bloomberg, analysts have been getting "dozens" of questions from investors and are struggling to understand why so much stock is being offloaded in such high volume. While there are no solid reasons, there are plenty of legitimate theories; lack of new games for 2018, no surprises for E3, and serious concerns that Nintendo the online service will fail badly in comparison to it's competitors Sony Playstation and the Microsoft Xbox One..

Amir Anvarzadeh, a senior strategist at Asymmetric Advisors in Singapore, told Bloomberg:

"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. The other question is whether their network infrastructure is really ready to cater to online gaming. They’re years and years behind on the network business. That doesn’t mean they can’t catch up, but Sony spent billions on fortifying the PlayStation Network expansion."

What are your thoughts regarding the upcoming Nintendo Switch Online Service?


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