| Mnementh said: So, the expectation of a bust and the last console before leaving the home console business (a sort of Dreamcast) instead of the profitable Gamecube left to rising shares, that implied that the traders expected Nintendo to make more money? Leaving the home console business should offset the winnings made by the DS (and at that point the potential of the DS was already uncovered, shares are about the future). So rising shares make no sense if the expectation is that the Wii fails. You still refer to gaming forums and gaming sites. not traders (which are the persons in question if asked about the shares). Even more, if it was as you say the shares should have exploded the weeks and months after the Wii-release, because it became clear the expectations were too low. Instead they kept on slowly but steady to grow, which indicates the sales were more or less in line with the traders expectations and created the base for a steady growth. |
Traders expected Nintendo to make money mainly through the portable market and the handheld market made up the vast majority of the profits for Nintendo during that period, DS was selling at PS2 level and shifting more software than any other platform under that traders would still peg shares to rise regardless of home console performance because the platform outperformed the GC by almost 8 times in sales, removing consoles wouldn't have offset that as the expectations were already taking that into account.
Shares also don't explode at launch they nowhere near work in that manner I work in the financial industry they will only climb steadily until a market correction occurs which can take over a year which is why in 2008 onwards their value increased more steeply. Launch would only give share prices a tiny spike, only thing that causes share prices to spike heavily or drop heavily is announcements that change expecatations drammatically like making mobile games for example as that changes the forecast or the business.
