Shares of Nintendo, SoftBank, and Sharp crash after investors saw disappointing results

Global tech firms have not impressed lately, and the start of 2023 emphasized that with a severe drop in shares for numerous firms. The latest examples include Japan’s Nintendo Co Ltd, SoftBank Group Corp, and Sharp Corp.

All three companies saw their shares drop steeply this Wednesday, after their disappointing results caused a negative reaction among investors. The share drop further emphasized the dim demand outlook for tech firms, even when it comes to global leaders such as these ones.

Nintendo, SoftBank, and Sharp performance

Nintendo saw a 6% drop in shares following a report of lower sales and profits, which led it to cut its full-year outlook. The Switch video game console maker also had to cut the sales target for Switch itself. With the new performance, however, Nintendo shares are on their way to seeing one of the biggest one-day losses since November.

SoftBank saw similar performance, with the shares falling by 6.2% following the report of quarterly loss. The shares were also hit by the Vision Fund investment unit, which crashed into the red for its fourth consecutive quarter, causing the confidence among investors to drop even further. SoftBank also gave a rather cautious outlook which further damaged the situation.

As for Sharp, it saw a massive 11.2% drop, which put it on track for the biggest single-day drop in the last three and a half years. On top of that, the maker of telecoms equipment and displays, a unit of Taiwan’s Foxconn, reported a quarterly loss as well, noting that the loss will likely affect its annual performance.

Consumer demand drops as Nintendo Switch exhausts demand

The results of the mentioned three firms further illustrate that the downturn in consumer demand has been absolutely devastating for tech firms. The drop in demand, of course, comes due to rising inflation and interest rates, which are caused by the global economic meltdown following years of COVID-19, geopolitical tensions, and alike.

Right now, Nintendo is battling soft sales for its Switch, which is slowly but surely becoming the aging platform. SoftBank has seen weakening valuations for its sprawling tech portfolio. Its CFO, Yoshimitsu Goto, stated that the situation remains tough, referring to the entire tech sector.

The tech firm declines have pulled the Nikkei 225 index into the negative territory as well. Meanwhile, analyst Mark Chadwick commented that Nintendo Switch is now a six-year-old console, and that demand is exhausted. The gaming community is ready for a new product, since everyone interested in buying Nintendo Switch has already bought one.

For the time being, it does not seem like the situation will get better for tech firms, especially the ones that have stopped innovating.