This chart tells me I should have invested my life savings in 2003.

Basically this. When you buy a stock you want the stock to increase in value over time. But when you buy the stock it has to increase more relative to keeping money in the bank or bonds or any other stock. If the stock doesn't have a lot of potential to increase in vaue it's worth less.

That doesn't mean that Nintendo is doomed, or the WiiU won't sell. Actually the WiiU could sell a huge number and the stock could still decrease. The problem is that it needs to exceed Wii sales and people don't see that happening.

I see it this way. If stock falls now it has more room to rise again later.

Zelda bump?

With all the hype surrounding the wii and the great success it found with the casual crowd, Nintendo's stock got greatly overvalued. The share price couldn't possibly be maintained unless Nintendo managed to keep a firm hold on the casual crowd; they have proven that the casuals are too fickle and the entertainment market to unstable for that. Right now the the share price is being revalued. It will continue to be erratic until investors get a better idea of what Nintendo is attempting to accomplish; When that happens, a more reasonable and stable price will be set. One that accounts for the fact that Nintendo is no longer the sole patron of the casual crowd and that they now cater to a portion of the hardcore crowd.

 I personally would not put any money into Nintendo stock right now until I have a better idea of the viability of their vision. I will monitor the situation closely and try to establish what I believe to be a reasonable price point based on information as it becomes available; that information is still much too vague. Buying Nintendo's stock at this time will be more a matter of faith than the technical and fundamentals.

Nintendo have zero presence in the new casual gaming markets, be it facebook or smart phone gaming.

Their only markets are home console and portable consoles.

Seeing the success they had in those markets this gen I have a hard time seeing how you can see growth for them in those markets ( market which by themselves are not really growing much). The only way Nintendo could have some growth there would be if they increased their market share compared to this gen and I have a hard time projecting the 3DS achieving a market share of over 70% or the Wii U having a market share of over 50%...

So where exactly are those prospects for growth ?

And if you really want to invest in stocks there are plenty stocks which are a lot safer now and have much better growth prospect. ( Google for example is quite a safe bet and the stock has decent growth perspective with the recent pullback..)

Did you know there are people in this world who are not in North America?

There are these interesting countries called "China" and "India" which have over 2 Billion people combined, and a rapidly growing middle class which is now starting to have the resources on a wide scale to buy computer hardware to play videogames and there is no (real) strong competitors in this market.

They revealed the Wii simply by showing the system (not even the controller), and followed that up months later by showing a concept video of people using the controller without any games ...

Or to put it another way, how many console reveals have had anything to play (even tech demos) or had videos of confirmed games that will be released at or near launch? How many when the system has (probably) a year or more before it is released?

well, if byer demand falls, it's normal for stock ot fall as well

when the demand will rise for 3DS, stock will rise, too

 Nintendo knows that too, they are not dumbs either, market saturation says hi, nintendo could probably have done wiifit3,4 & 5 but none of them were going to do the numbers of the original wiifit, and the same goes for most of their games... That´s probably the other reason why smash was still at $45- $49, mario kart was a $49, NSMB $49, they sell a lot over the time... Investors are not dumb either, the market is just  reacting to the new consoles, 3ds is doing ok, the software lineup for this hollyday is stellar and it´ll take it to the roof of the charts with no problem, the wiiU is nintendo's new bet, and besides all the bad comments it has a great future ahead of it, as big as the wii? maybe, maybe not, nobody knows...

 for some additional reading, this is a little old, (but still) if you want to know who "owns" nintendo this could be interesting...

http://seekingalpha.com/article/43310-who-is-buying-nintendo-stock