There were quite a few developments in the video game space last week. The Japanese giant Nintendo NTDOY, released its much anticipated console, Switch amid much fanfare. Also, Facebook Inc FB slashed price of its VR headset, Rift by $100 while Sony Corp’s SNE PS VR breaks sales records. 

Recap of the Developments

1. Nintendo’s Switch had a “smooth debut,” reported Bloomberg. According to the report, the units were soon outsold following the release “signaling Nintendo is on track to reach its goal of shipping 2 million units by the end of the month.”

Switch, priced at $300, combines the functionalities of both conventional consoles and handheld devices. Switch is designed to attract casual gamers who are increasingly using mobile. Nintendo, after staying away from mobile gaming for long has now become highly focused on mobile games. Last year’s smash hit Pokémon Go gave it the much needed impetus.

The new Zelda game which has a Metacritic rating of 98 out of 100 should boost Switch sales. Nintendo needs a hit in the form of Switch, following the debacle of its last console Wii U. However, a hefty price and apparent lack of any ground-breaking/differentiating features from the consoles that are available in the markets right now could cost the company heavily. Nintendo carries a Zacks Rank #3 (Hold).

2. Facebook has slashed the price of its VR headset Rift and Oculus Touch Motion controllers by $100 each. The step is widely viewed as a measure to boost sales. FB chief Mark Zuckerberg earlier commented that he expects Rift to sell about 50 to 100 million units over the next 10 years. However, Bloomberg, quoting SuperData Research, reports that only 350K units were sold last year. Price has been a major deterrent for Rift having failed to gain a mass adoption. Rift was originally priced at $599, much higher than Sony’s PS VR.

Facebook had acquired Oculus for $2 billion in 2014. With Oculus, the company is trying to fuel the company’s ambitious AR/VR efforts. Oculus has long been labeled as a multibillion dollar opportunity along with Facebook’s other subsidiaries like Messenger, Instagram and WhatsApp. Facebook carries a Zacks Rank #3.

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