Nintendo Switch may be switching things up for the video game company’s shareholders.
Although investors initially seemed cautious in the days following Nintendo’s March 3 release of its newest gaming console, the Switch, shares of the company are up 13% amid indications that there is unexpectedly strong demand for its new device. The company’s stock price now sits at $29.52 in midday trading Monday, bringing Nintendo’s value back up to its highest level since shares hit a mid-December swoon.
Sales that have been much higher than anticipated. And last week, Nintendo (ntdoy) announced it will up its production of the Switch for the fiscal year ending March 2018 to 16 million units. That’s double the 8 million units Nintendo had originally planned on making. That brisk pace appears to put the Switch on track to match sales of the ultra-popular Wii, which ended up selling more than 100 million units and was the driving force behind sending Nintendo’s stock price to an all-time high of more than $78 in October 2007.
As encouraging as that sounds, though, such initial sales figures should be taken with a grain of salt. Nintendo’s last console, the Wii U, sold 3 million units in its first six weeks on the market in 2012, but ended up topping out at just 13.56 million units total in its time on the market, which was far below the expectations.
The run up of Nintendo’s stock price over the last several days may seem like a huge leap, but its nothing compared to the furor surrounding the company’s July release of the Pokemon Go mobile app, which sent shares soaring 112% to $37.37 in less than two weeks. However, much of that surge was short lived as the stock lost more than half of its gains in the following week and a half, settling near $25. The company benefitted from another boost in September when it announced it would release another mobile app, Super Mario Run. The price jumped 29% the day of the announcement and held much of that gain afterwards, but ultimately shares of Nintendo dropped 16% the week following the app’s release in mid-December. The app was met with a certain degree of disappointment, both with the gameplay and its $10 price tag, so investors pulled out a bit as they waited to see how the Switch would fare.
Aside from the brief Pokemon Go-inspired stock surge last summer, Nintendo’s share price hasn’t been this high since 2011, when the Wii was still on top of the world. Although reaching the heights of 10 years ago seems unlikely, it wouldn’t be surprising if Nintendo’s stock trends higher given that it appears the Switch is off to a similar start to the Wii.