Analyst WiiU GameStop sales below expectations

[Dodece]

HappySqurriel said:

Dodece said:

Thirdly projections aren't the same as expectations. Nintendo may have in fact expected to sell more units, but was conservative enough to project low end figures. Basically there is a lot of upside to playing it safe. It really decreases the likelihood of their product being seen as a failure.

While companies do fail to meet or surpass projections, for the most part they try to project sales as accurately as possible because many investors don't like companies that try to inflate their stock through manipulative projections. Essentially, claiming that Nintendo's projections are the same as their expectations is a fairly reasonable thing to do.

Not based on this companies track record. Nintendo is a terribly conservative company. The conservative mindset always allows for a margin of error. Rather then trying for perfection. There is nothing fundamentally wrong with this presentation. Nintendo is basically managing expectations, and in doing so they are creating a safe and credible base line.

Investors abhor uncertainty, and conservative estimates are all about certainty. Basically the more faith there is in estimates at least being met. The safer it is to bet on those estimates. As compared to a company that is more aggressive with its predictions, and has a high likelihood of missing the projections by much wider margins, because they bet on best or worse case scenarios. I suppose there is a wisdom to betting on companies that require more intuition on the part of investors to establish their own base lines, and I suppose it can be profitable.

That doesn't mean that every company should make that their goal, and I sincerely doubt there is legion of investors out their demanding that every company has to be balls to the wall aggressive with their projections. There are a lot of high risk companies out there to invest in. So Nintendo not being one of them doesn't seem to be a problem.

Anyway I feel it is pretty apparent that Nintendo is extremely conservative. It isn't just that they almost always meet or exceed their projections. I think it has been a good long while since they honestly missed a release date for one of their first party games. I understand they have delayed a number of first party titles for the Wii U, but that was explained as balancing out the release schedule, and I don't recall if they ever had specific release dates to begin with.