Good morning and happy Presidents' Day! Today we're exploring:
Switch up
Since its founding in 1889 — when the company began manufacturing handmade Hanafuda playing cards — iconic video-game maker Nintendo has become accustomed to continuously reinventing itself. Even in just the last 2 decades, the consumer electronics giant has produced a host of different game consoles that have brought joy to hundreds of millions of users around the world.
But, like its predecessors, Nintendo’s latest hit, the hybrid Nintendo Switch, is starting to fade — with the company behind the console announcing yesterday that the Switch’s successor won’t arrive until 2025. Investors had expected a new model this year, with the delay sending the company’s shares down 6%.
Inconsolable
Nintendo sales figures reveal that its most successful consoles have a lifespan of approximately 10 years. The Switch is set to celebrate its 7th birthday next month. Although selling the actual hardware isn’t as profitable as selling the games and software that come with it, you can’t do the latter without the former, making Nintendo’s console releases critical to the financial health of the business.
The delay means that the new console — which has been dubbed the "Switch 2" by many in the industry — will have even bigger shoes to fill, as the Switch recently became the third best selling console of all time.
Related reading: Sony has just cut sales forecasts for its flagship PS5 console.
Pay a visit
Following the devastating wildfires seen across Hawaii last August, the island state is considering a new tourist tax to fund conservation and restoration projects in hard-hit regions such as Maui.
Gov. Josh Green proposed a $25 “climate impact fee” for vacationers in his second State of the State Address. The tariff is projected to bring in tens of millions a year — with half earmarked for disaster insurance to encourage investment in high-risk areas, as well as fire breaks to shield vulnerable communities.
Paradise lost
This isn’t the first time Hawaii has attempted to pass a similar bill: in April, lawmakers debated a $50 annual green fee that would grant visitors access to parks and beaches; however, that proposal failed in the final hours of a legislative session. Since then, last summer’s wildfires — the worst disaster in Hawaii state history — have caused an estimated $4-6 billion in economic losses, burning thousands of acres of land.
The urgency to protect Hawaii’s natural assets comes as tourist numbers have soared, recording around 10 million visitors in 2019, roughly 7x the state’s ~1.4 million residents. Although the vacationer count hasn’t quite recovered since the pandemic, the state’s reliance on tourism means that the loss of its renowned scenery comes with both ecological and economic consequences — in 2022, tourism was estimated to make up ~18% of Hawaii’s GDP.
Zooming out: Many tourist hotspots are enacting similar legislation: from this spring, Venice is charging a €5 day rate to mitigate damage; Bali recently introduced a $10 sustainability fee; and in Greece, which was also ravaged by wildfires in 2023, a “climate resilience fee” is now added onto lodging bills.
Bronze medal
14 years after losing its position as the world’s second-largest economy to China, Japan has been relegated to 4th in the global standings, as the Asian superpower unexpectedly slipped into a technical recession in the final quarter of last year. The news caps a sluggish decade... which capped another sluggish decade… which capped a “lost decade” for the Japanese economy in the 1990s, having been plagued by stubbornly low inflation, limited productivity gains, and an aging population.
Stepping into the medal positions is Germany, which saw its nominal GDP (measured in USD) reach $4.46 trillion based on last year's average exchange rate. Despite this technical milestone, Germany faces its own set of challenges: the European economy is only 0.7% larger in real terms than it was pre-pandemic, as it wrestles with higher energy prices, a slowdown in its main export market (China), and the complexities of transitioning its heavy-manufacturing industries to green energy.
US vs. the rest
The UK also announced that it had entered into a recession at the end of last year, with a 0.3% contraction in the final 3 months. With China also adjusting to a slower pace of economic progress, the US remains something of an anomaly, with GDP growing 3% last year as America waited for a recession that never came.
• Sneaker behemoth Nike is laying off 2% of its employees, cutting more than 1,500 jobs as it looks to save ~$2bn in a 3-year restructuring plan.
• Coral grief: Rising seawater temperatures in 2023 killed over three-quarters of human-cultivated coral reefs in the Florida Keys, with only ~5% of 1,000 replanted elkhorn corals surviving.
• Reddit has signed a $60m content licensing deal with an unspecified AI company ahead of its IPO, where the social media firm is seeking at least a $5B valuation.
• Down the drain: Madame Web, Hollywood’s latest epic featuring Spider-Man adjacent characters, has crawled to a lackluster $25.8m opening weekend — a record low for Sony’s superhero flicks.
• Chicago or New York style? However you slice it, these are the Top 100 pizza restaurants in the US, according to Yelp.
• Movie titles: Stat Significant deep-dive into films that popularized (or ruined) baby names.
Off the charts: Which company has this corporate structure? Hint: It just completed a fundraising that valued it at $80bn. [Answer below].
