Japan’s Nintendo played a game for retail investors’ hearts on Tuesday, announcing a 10-for-1 stock split effective Oct. 1, a -called move aimed at boosting the liquidity of the video game maker’s stock.

The announcement comes as Nintendo said it expects to sell 21 million Switch consoles in the fiscal year that begins April 1, down 9 percent from a year earlier and the second year of declines the company has dealt with parts shortages.

Nintendo President Shuntaro Fukurawa said at a news conference that the parts shortage has continued into this year, and there is no certainty when it will end.

A model with an OLED screen, introduced last November, has driven demand for the Switch in its sixth year on the market, with 5.8 million sold as of March, but the upgraded device remains in short supply.

The Kyoto-based company’s stock split comes as a slew of tech companies, including Amazon and Google parent Alphabet, have made similar moves in recent months.

Such splits are often seen as positive for the company’s stock price, as lower costs make them more accessible to some investors. Shares of Nintendo, up 5% so far this year, ended flat ahead of its earnings report.

Nintendo sold 23.06 million Switch consoles in the year ended March. That compares with a forecast of 23 million in February.

Nintendo, which relies on in-house games to drive game sales, expects to sell 210 million software this year, down from 235 million last year.

Although the Legend of Zelda: Breath of the Wild sequel has been until spring 2023, the company has a strong pipeline, with upcoming games this year including Splatoon 3.

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© Thomson Reuters 2022



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