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PGC Digital: How Switch is breaking Nintendo's 'cyclical stock' performance

Further growth expected in 2021 and 2022

PGC Digital: How Switch is breaking Nintendo's 'cyclical stock' performance

The Nintendo Switch looks to be the first Nintendo console to break the company's "cyclical" stock trend for three decades.

As detailed by Roundhill Investments vice president of research Mario Stefanidis at PGC Digital #6, the Japanese game maker was first listed as a publicly listed company on July 21st, 1983 and has seen a recurring trend in its stock for the last 30 years.

This typically begins when Nintendo launches a new console and the stock price jumps before slowly falling over the proceeding years until it releases its next console.

The only exception to this was the Nintendo Wii from 2007 to 2008, where the stock has a huge upward slope, then declined rapidly over the years as the Wii U failed to take off.

The Switch, however, has broken this trend as it continues to grow in popularity, with further growth expected in 2021 and 2022.

A sign that the handheld/console hybrid was doing something different than its predecessors were when Nintendo's stock price jumped to a 19-month high following its launch in China.

Break the wheel

"It's really unlikely that Nintendo will ever return to its 'loom and bust' cycle where they launch a console and if it takes off, the stock price goes up [and] if it doesn't - like the case in the Wii U - the price really languishes," said Stefanidis.

Adding that: "Even though the Switch will be five years old by 2022, revenues are continuing to trend up. This is totally countercyclical to what Nintendo has experienced with their previous launches."

Nintendo stock market cap currently sits at $76.8 billion, second only to Tencent globally.

An additional contributor to Nintendo's continued upward trajectory has been its experimentation in the mobile market.

The most recent example of this was Mario Kart Tour racing past $200 million in worldwide revenue.

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Deputy Editor

Matthew Forde is the deputy editor at PocketGamer.biz and also a member of the Pocket Gamer Podcast. You can find him on Twitter @MattForde64 talking about stats, data and everything pop culture related - particularly superheroes.