| TheLastStarFighter said: Just as a footnote to some of the stock price chat we've had, Nintendo announces a massive title for this fall that will probably move millions of hardware units and sell upwards of 15 million copies and has a worldwide simultaneous release for the first time. What happens to share price? It drops 3% naturally. As game fans and shareholders we can mix our passions, but most investors do not. They do not understand the business. They do not follow games. They follow profits, dividends and hype. NTDOY is stuck in a slump until Iwata says "profit!", and until kids and wives and girlfriends start seeing that fancy touchscreen pad at a friends place and want one of their own and CNN does a story about it. We need to be patient. |
They do understand the business, they do follow games. its usually the fans of the stocks who are late to the party or do not see the writing ont he wall since they are blinded by their fandom. What has materially changed from Nintendo going into 2013 and that of Nintendo from 2001? They have console that will have little to no impact to overall console sales and a dominant handheld market. During the 1990s and up until 2005, this was the typical Nintendo MO and the stock traded in range of 10 and the high 20s. 2006-2007 was the outlier years where sales and earings expanded expotientally and Nintendo was assigned a higher and higher stock price. Nintendo has nothing like that on the horizon, so news of games that many investors expect to come is not going to move the stock alot.
My experience in the financial world tells me that very view investors or investment advisors know anything about the indsutries they invest in. How could they? They studied economics, finance or whatever. They are not engineers, computer programers. Since only a small fraction of the world population owns a game system, and among those only a small percentage are enthusiests, and among those an even smaller percentage looks at the industry from an unbiased business perspective, I would suggest that very few people dealing with financial investments understand the games industry. This applies to pretty much any industry, really, and it's why most people in the world aren't rich. The only thing I have hear from analysts is that smartphones and tablets are cutting into the industry and that's why sales are down this year. They completely ignore the cyclical nature of gaming systems. And a lot has changed in the industry, and with Nintendo, since 2001. Even if WiiU is not a Wii-success, it's still the follow to Wii and will sell decent if not spectacular. At least 50% should be expected and that would be enough to put Nintendo into billion dollar profit range if the Yen is decent.
