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Figgycal on 17 January 2014
osed125 said:
Figgycal said:
osed125 said:

And after the price cut, it was selling at a heavy loss until NSMB 2 came out. This is where the risky business decisions end up paying off in the end.

If by "selling at a heavy loss" you mean "making profit on each system sold", you are correct. According to Eurogamer- each 3ds costs $101 dollars to make and Nintendo were selling them for $250. They were criminally overpriced because they knew demand was there for the system. There was no risky business descision involved in lowering the price. None of Nintendo's previous consoles were risky. They all rely on making the system cheap and making profit on each unit sold. For whatever reason they went the opposite direction with the Wii U and it hasn't been working out.

That's only taking into consideration how much each part costs. Assembling, marketing, packaging, what the retailers takes, and other stuff aren't in those $101. 

I believe Nintendo was breaking even or taking a very slight profit with the 3DS at launch.

I wish I had actual numbers about how much it costs for shipping and such, but I don't believe that is necessary in this case. A 149 dollar mark up is unaceptable. There is no doubt that Nintendo is making profit on each 3DS/ 3DS XL/ 2DS sold.

I believe that's why retailers are able to sell 3DS XL's below the MSRP so often. I rarely see 3DS Xl's actually sell for 199.



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osed125 on 17 January 2014
Figgycal said:
osed125 said:

That's only taking into consideration how much each part costs. Assembling, marketing, packaging, what the retailers takes, and other stuff aren't in those $101. 

I believe Nintendo was breaking even or taking a very slight profit with the 3DS at launch.

I wish I had actual numbers about how much it costs for shipping and such, but I don't believe that is necessary in this case. A 149 dollar mark up is unaceptable. There is no doubt that Nintendo is making profit on each 3DS/ 3DS XL/ 2DS sold.

I believe that's why retailers are able to sell 3DS XL's below the MSRP so often. I rarely see 3DS Xl's actually sell for 199.

You'd be surprise how much those things cost, also the retailer takes a big chunck of that money. Now there are making profits on each unit of course, however after the first price cut in 2011, they were selling each 3DS at a loss. That's what Nintendo said to investors back in 2011, and the 3DS start selling at a profit when NSMB 2 launched in 2012 (basically 1 year after the price cut). 

Nintendo has very little to do with that. Nintendo sells to retailers, whatever deals the store wants to do is their thing.



Nintendo and PC gamer

Anfebious on 17 January 2014

It's close, Nintendo third party. Megaton.



"I've Underestimated the Horse Power from Mario Kart 8, I'll Never Doubt the WiiU's Engine Again"

savisn on 17 January 2014
Figgycal said:
Mr Khan said:
Figgycal said:
Ocilayton said:
Man I wish I could by shares. I would buy every singleone I can now

You'd be holding on to the stock for a long time.

Not really. Some of our more stock-savvy posters have pointed out that Nintendo is actually criminally undervalued right now, that their current market cap is only about 20% more than the value of Nintendo's cash-on-hand, meaning that the stock price does not at all reflect the value of Nintendo's capital or (the far more important one) intellectual property.

If it was announced tomorrow that Nintendo was going to be auctioned off piece by piece, the stock value would double overnight because the market cap is not reflective of the company's actual value, and in the case of total dissolution of the company, it would be.

I didn't say that in my comment at all. My comment was only about stocks-- not Nintendo as a whole, but I also don't think 2014 will be a bright year for Nintendo. This is their third year in a row losing money and the only things to have affected Nintendo's stock prices in the past year were a cheaper Yen and the news of China lifting the console ban. Buy the stock at 15.24 (at the time his comment was posted) and hoping stock prices go back up to 17.50 sometime in the next year isn't a great investment. I'm only an economy student - so IDK. I'd like to hear what the stock-savvy posters think.


2013 wasn't a bright year for Nintendo and I made 60% return in one year, which is great by any measure.  If you believe in a company's long-term value either as an operating company or in some other form (think what it would be worth to either Sony or MS to own Nintendo IP exclusivly) then buying at the lowest point when it looks dire can be a great risk.  The key is to understand the real value, and the risk of bankruptcy.   Cash plus IP make Nintendo a pretty attractive turn-around overall.

That said I do think it could and probably will go lower.  I'll probably get back in between $12 and $14 as I view $12 as a rough floor that it must rise above just based on their cash provided they aren't squandering it.  Sure it can temporarily dip lower as it has this year, but it's fairly low risk in my opinion.   If Nintendo was highly levered (lots of debt) it would be a different story as debt coventant misses can trigger bankruptcy even in healthy companies.

Nintendo is an interesting play - it's not followed closely by large investment houses.  FUD factor is massive - just check out some of the things that get published on Motely Fool and Forbes just today.  They are so far off the real story sometimes that it's pretty easy to stay ahead of them just by following this site - which is why I'm here.   VGC numbers aren't perfect but they give a good indicator overall.