😇 Divine dividends

What’s going on here?

Nintendo faced the music on Tuesday, acknowledging the tide's turned for its Switch consoles.

What does this mean?

The Nintendo Switch has long had the gaming world in its thrall, and the trusty console brings in over 90% of sales for the Japanese giant. But even the brightest stars must eventually dim – and the Switch isn’t shining like it used to. Nintendo slashed its forecast twice last year, and despite launching some record-breaking games, holiday console sales weren’t the festive feast it hoped for. If that’s a hint, then the stats drive the point home: Nintendo sold 18 million consoles last financial year, a 22% drop from the year before. That hit both revenue and profit – and the firm’s admitted that its forecast for the current financial year, at just 15 million consoles, could be a long shot.

Why should I care?

The bigger picture: Game on.

The ups and downs of Nintendo’s consoles are nothing new – and after six years on the market, with a few makeovers and updates, it’s no surprise we’ve passed “peak Switch”. That means Nintendo’s facing a true challenge: coming up with a superstar successor that can take up the torch and rake in sales as the Switch wanes. Let’s just hope the firm has learned a thing or two from the famous flop of the Wii U, its unloved follow-up to the wildly successful Wii…

For markets: Super Smash Bros’ smash hit.

A new console’s unlikely to see the light of day for at least another year, and analysts are predicting a downhill slide for Nintendo’s valuation until then. In the meantime, the firm needs to keep the dough coming in from its 114 million annual paying users – something its lineup of world-famous characters should help with. Plus, with the sweet box-office success of The Super Mario Bros. film, it might just be on the cusp of a new little gold mine.

What’s going on here?

Saudi Aramco took a slip, reporting an unsurprising dip in profit on Tuesday.

What does this mean?

The oil market has lost some of its greasy charm in the last year, with inflation and rising interest rates stoking folks’ recession fears and throwing a wet blanket on oil demand and prices. That dreary backdrop meant analysts weren’t exactly gobsmacked by Aramco’s profit dropoff – down 19% last quarter from the same time the previous year. The twist: bearing the market in mind, the firm is actually moving like greased lightning. After all, Aramco’s profit still outstripped both expectations and the previous quarter’s takings. And if that wasn’t enough for investors, Aramco announced plans to introduce a performance-linked dividend on top of its industry-leading base dividend. Experts think that high-rolling move could raise payouts by over $20 billion this year – and that prospect propelled Aramco’s stock back to September’s highs.

Why should I care?

Zooming in: Oiling the country’s wheels.

There’s a bit of a backstory to that dividend decision. The Saudi government spent more money than it brought in last quarter, thanks to dwindling oil revenues and expensive attempts to diversify the economy. And since the government owns almost all of Aramco, the majority of these extra dividend payouts will flow right into state coffers. And if that’s not enough to make up the difference, it could always auction off more Aramco shares in a secondary offering – an option it’s already been weighing up for a while.

The bigger picture: Back-up plans.

Aramco’s skeptical about the West’s green-energy enthusiasm, but it isn’t idly twiddling its thumbs. The oil titan has been spending big on petrochemical projects in Asia, and that makes a lot of sense: Aramco knows that demand for plastics, fertilizers, and paint (usually made from oil-based chemicals) is likely to climb in the coming decades, which could plug any gap in gasoline and diesel demand.