Dr. Serkan Toto explains why Nintendo's stock drop following Switch Lite sales data is "a big joke at best and a scandal at worst"

Switch Lite launched in Japan last week, and we now have the firm numbers on how the system sold in its first 3 days. According to Famitsu numbers, the Switch Lite sold 177,936 units in 3 days. Depending on how you group together launches, that would make the Switch Lite either the second or third-best "additional hardware SKU" launch in Japan. First place goes to the 3DS XL, which launched alongside New Super Mario Bros. 2. Mario is a much more popular franchise in Japan than Zelda, so it's no surprise to see the 3DS XL see better launch sales.

I think we can all agree that the Switch Lite had a pretty great debut in Japan, but if you were to look at the stock market reaction, things would seem like the complete opposite. News of the Switch Lite sales in Japan caused Nintendo's stock to fall over 4% in a day, which is the biggest drop Nintendo has seen in the last 8 months. What on earth were investors looking at, and how could it lead to such a different reaction? Dr. Serkan Toto, CEO of Tokyo-based game industry consultancy Kantan-Games, has put together a great breakdown of the situation.

As you might know, early Switch Lite sales data came in at the start of the week, and it put the platform at 114k units sold in 3 days. Still not a bad number, but lighter than some would expect. That figure would put the Switch Lite somewhere around the 10th spot in the "additional hardware SKU" launches in Japan, once again depending on how you group hardware together. Now that 114k figure still wouldn't be enough to cause such a major stock drop to those who follow data, but according to Dr. Serkan Toto, the issues really stem from comments by Citi, coupled with Bloomberg reporting.

Bloomberg put together a feature on Switch Lite sales, saying that the numbers were "soft" based on comment from Citi. Citi had put their estimates for launch sales in Japan at 300k, which is a figure "totally detached from reality" according to Toto. We are certainly inclined to agree, as the best result for "additional hardware SKUs" in Japan would be the New 3DS + New 3DS XL, which hit 233k in 2 days. To expect the Switch Lite to reach 300k in 3 days based on one SKU certainly seems near impossible, if not highly improbable.

Taking things a step further, the Switch originally sold 330k at launch in Japan. To think a hardware revision would match literal week-one launch sales for a brand-new platform seems absolutely insane, but that's apparently what Citi was thinking.

Finally, the situation gets even weirder with Bloomberg. The company ended up quietly correcting their initial 114k hardware number to a figure of 161k, and did so without any fanfare or expanded statement on the matter. As Dr. Serkan Toto says, “Oops, we were off a mere 41% because the numbers were only preliminary and caused a drop of 4% in a US$50 billion company.” As you can see, these goofs made by Bloomberg and Citi have caused quite a big headache for Nintendo.

Please make sure to read Dr. Serkan Toto's full blog on the situation here. It's well worth your time, and really goes to show how just how volatile the stock market is, especially when those who should be in-the-know seem to have no idea what's going on.