By using this site, you agree to our Privacy Policy and our Terms of Use. Close
OceanJ on 07 January 2013
Edit Thread
TheLastStarFighter said:
I have bought a significant amount of Nintendo stock. I can say that a big reason I purchased was because of the leadership of Iwata and Myamoto. Nintendo's software has been other-worldly successful and Iwata has lead a complete revival of the Nintendo brand. 3DS is trending ahead of its predecessor and that will likely continue as DS dies of in the US. WiiU just launched to around 80% of the sales of Wii despite selling in a very different environment and at a significantly higher pricepoint. As a shareholder I'm very pleased. The philosophy of not going all out to push tech boundries is very wise. The low price and touchscreen interface should appeal to a mass-market audience. People may want a better-looking NSMBU, but it was probably affordable to produce and should generate buckets of profits. And as far as 3rd party support goes as a gamer I want it but if it doesn't come I'll just buy a PS4 or Nextbox depending on which seems better. But as a shareholder I don't really care as long as the systems still sell. 3rd party is great, but if you have a 1st part dominated system you make way more profits since you make more money off 1st party. I only want to see more 3rd party support in that it will help drive sales, especially late-life sales...but by then I will have probably sold my stock anyway.

I too have used the YoY 3DS sales increase, as well as the fact it's still outpacing the DS globally in arguments in Nintendo's favor.

But then I considered the following:

Nintendo's biggest markets are outside of Japan.  U.S. and European growth specifically must be used and cited as markers of success & future prospects since Japan alone can't sustain growth for Nintendo.

  • 3DS Sales for U.S. for 2011, Release Date 3/27:  4,107,353  ...9 months on the market (105,317/wk)
  • 3DS Sales for U.S. for 2012:  3,511,517  12 months  (67,529/wk)

The 3DS sold 600,000 fewer units in the United States total in calendar year 2012 though it had more available games, a price cut, and 3 more months on sale vs 2011 - and dropped 38k in weekly average sales.

Now Europe:

  • 3DS Sales for Europe for 2011, Release Date March 25th: 3,597,727...9 months on the market (92,249 / week)
  • 3DS Sales for Europe for calendar 2012:  3,594,486 12 months (69,124 / week)
3DS sales for Europe in 2012 fell by 3k total though it had an extra 3 months on the market, and dropped 23k in weekly average sales.   
CONCLUSION:  3DS is declining in Nintendo's key markets.
Japan:
  • 3DS Sales for Japan for 2011, Release Date Feb 26th:  4,312,326  ...10 months on the market  (99,592/week)
  • 3DS Sales for Japan 2012:  5,503,782  12 months on the market (103,845 / week)
Japan saw a YoY increase of 1,191,456 3DS units, with a 4k weekly average increase in unit sales...leaving a Net Global YoY Increase of 588,456
CONCLUSION: 3DS Sales in Japan is the only reason for the YoY sales increase.
2011 Global 3DS Sales:  13,250,062  (Over 300k / week)
2012 Global 3DS Sales:  13,775,151  (264,907 / week)
Using the above weekly sales information for 2011, we see the average weekly sales-rate for 3DS declined in 2012 globally despite the YoY increase
Now what about the fact that the 3DS is outpacing the DS in sales?  How did the DS do in the US, Europe, and Japan over it's first couple years?  
In it's first 52 Weeks in the U.S., the DS from Nov 27. 2004 - Nov 26 2005 sold 2,823,080.
In it's second 52 Weeks, U.S. - 4,610,290
The DS gained dramatically in popularity in the U.S. during its 2nd year available for sale.
Europe DS first 52 Weeks on sale, release date March 11, 2005:  4,125,618
Europe DS second 52 Weeks on sale: 6,740,467  
The DS showed a large upward trend in Europe during it's 2nd year on sale similar to the U.S.
Japan DS first 52 weeks on sale: 3,909,841
Japan DS second 52 weeks on sale: 8,811,135
Japan saw a huge DS increase like the U.S., and Europe.
CONCLUSION:  Though the 3DS is outpacing the DS in unit sales globally after nearly 100 weeks of their respective launches,  it has done so due to A) selling more units initially riding on the shoulders of its predecessor - the DS's success, but the 3DS's declining trend in the US and in Europe, despite strong Japanese sales, will shortly show that the DS will outpace the 3DS over a longer time horizon, and that the 3DS does not have a chance to match life-time unit sales of the DS.
FINAL CONCLUSION:
What all of this seems to mean is that the gaming landscape is shifting underneath the feet of Nintendo in its two key markets, the U.S. and Europe.  Its handheld is in decline most likely due to iOS & Android Smart-Phone & Tablet gaming, which are trending upwards.  This paints a rocky picture for Nintendo, especially if their Wii U system does not catch on as hoped.  
This appears to be why Investors are so Bearish on Nintendo and feel Nintendo management is out of touch with most of the gaming world.