Nintendo announces a 10-to-1 stock split, with Switch sales dropping 9%

Nintendo Co Ltd (7974.T) of Japan made a pitch for retail investors on Tuesday, announcing a 10-to-1 stock split beginning Oct. 1, a long-awaited move aimed at improving the videogame maker’s share liquidity.

Nintendo made the surprise statement when it announced that it expects to sell 21 million Switch games systems in the fiscal year that began on April 1, down 9% year on year and the company’s second yearly decline due to component shortages.

Nintendo President Shuntaro Fukurawa said at a press conference that component shortages have lasted into this year and that it is impossible to predict when they will stop.

The November announcement of an OLED-screen edition, which sold 5.8 million devices through March, bolstered demand for the Switch, which is now in its sixth year on the market, although the improved device remains in limited supply.

The stock split by the Kyoto-based company follows a succession of similar moves by tech companies in recent months, including Amazon.com Inc (AMZN.O) and Google parent Alphabet Inc (GOOGL.O).

Companies’ share prices often benefit from such splits since the decreased cost makes them more accessible to some investors.

Nintendo’s stock has gained 5% this year and finished flat at 56,360 yen ahead of its earnings report.

In the fiscal year that ended in March, the game company sold 23.06 million Switch units. This is down from a projection of 23 million in February.

Nintendo aims to sell 210 million units of software this year, down from 235 million last year, as it relies on in-house products to boost sales.

The company has a strong pipeline despite the delay of the sequel to “Legend of Zelda: Breath of the Wild” to spring 2023, with upcoming titles this year including “Splatoon 3”.