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Forums - Nintendo - Any other company would have fired their CEO by now. Time to fire across the board at Nintendo!

OceanJ on 08 January 2013
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.


Iwata will say 'profit' on Jan 30...original Q3 release on Google said the 21st, but according to Nintendo's IR page it's scheduled for the 30th.

Man, it's going to be a very impatient 3 weeks for me.

But what we need from Iwata on the 30th, is not just to say 'profit', but an upward revision for FY2012.  If they move the annual profit forecast back up from 6 billion yen, we'll see a significant uptick in share price.

I think as shareholders we also are hoping to see Wii U sales numbers continue to hold steady.  As close to 200k / week as possible!



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Train wreck on 08 January 2013
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.



Roma on 08 January 2013

rolls eyes*



    R.I.P Mr Iwata :'(

SaviorX on 08 January 2013

Business side, I don't care what goes on.

But they need to fire whoever is making the games weak.

They rushed out their last several Mario games. Being their flagship IP, that kind of half-ass abuse is unacceptable. Their last several Zelda games (besides the OOT Remake) have been poor as well; get rid of Aonuma.

Other M was a disappointment, but I welcome experimentation, that is how we got the great Pokemon Snap.

Nintendo has not been lazy persay, but their focus should probably be narrowed a bit. I have no right to tell a corporation what to do, but there is a reason I haven't bought any of their games outside of Skyward Sword for a few years...



Leatherhat on July 6th, 2012 3pm. Vita sales:"3 mil for COD 2 mil for AC. Maybe more. "  thehusbo on July 6th, 2012 5pm. Vita sales:"5 mil for COD 2.2 mil for AC."

OceanJ on 08 January 2013
Train wreck said:
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.

The share-price should not remain the same if the "M.O." as you defined it holds over the years...it should go up.

I think the Wii U still holds great potential and in theory the U can still catch fire with the public and turn into a phenomenon, and have an idea of what it would take to do so.



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Tarumon on 08 January 2013
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.


As a Nintendo fan, I'm loving what I'm seeing coming out of Nintendo for 2013.  As a Nintendo investor, I'm also hit with a $10k loss on the heels of such a joyous announcement.  Though to be fair the ADR trading follows Japan, so tonight maybe will see more cheerful trading.

Nintendo as a gaming company continues to be great, but as an investment, it's a tough tough stock to love.  You have to have patience and you have to be willing to continue to buy into this weakness and also need to hang on for the ride up.  If you intend on flipping for anything less than a 2 bagger, there are just tons of other stocks that will outperform this guy.  The only positive spin, and the reason I picked it for long term accumulation is it is so out of favor, it is essier tp accumulate larger position over time.  Hasnt gone anywhere but down for a few years, so every year when you are looking to buy, this thing is cheaper...again.  But real risk is tiny, the company's market cap is overwhelmingly backed by cash.  

Nintendo as a company is very Japancentric.  As an investor, I fail to see the charm of Reggie, and fail to appreciate their new marketing guy Moffit as I clearly see poor and missed opportunities to promote the 3DS and Wii U.  The Yen reversal will help Nintendo's buttom line, but their year end sales projections not so much.

Back when they "downwardly" revised back in 3rd quarter, their revised numbers were still...unattainable in my eyes. Net Sales of 800 billion Yen by year end when 6 months to date to 9/30/12 was 200 billion.  Some of you are better at recalling history than I am, when has Nintendo ever achieved a 2nd Half vs 1st Half Net Sales multiple of 3 to 1?

So to some of us who own this stock, my suggestion is, you must find it in you to add to your position when you invest in dogs like this.  The pros and mutual funds don't want Nintendo on their rep sheets, in fact, if they did, they'd dump it so they look like geniuses with mostly winners come year end.  When you bet against the market, you pretty much have ensured losses if you arent prepared to ride it down, and buy buy buy.

 



TheLastStarFighter on 08 January 2013
Train wreck 43 minutes ago
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.



OceanJ on 08 January 2013
Tarumon said:
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.

 

Nintendo as a company is very Japancentric.  As an investor, I fail to see the charm of Reggie, and fail to appreciate their new marketing guy Moffit as I clearly see poor and missed opportunities to promote the 3DS and Wii U.  The Yen reversal will help Nintendo's buttom line, but their year end sales projections not so much.

 

I wanted to ask if you can elaborate on Nintendo being a "very Japancentric" company?  

Do you mean from a business-culture standpoint? If so, how would you characterize that?  I've read you mention their Investor Relations group in another thread, does that factor in?

Their biggest markets are outside of Japan so in that sense they're clearly not Japan-centric.  

I'd say it's clear they answer to no one. They disregard the gaming industry at large and just do their own thing.  There's something they call "The Nintendo Way" internally at Nintendo...but I still don't know what that is exactly.  Their massive hordes of cash allow them to pretty much do whatever they want and not answer to anyone.

But as a foreign investor in Nintendo I'd like to better understand what Japan-centric means and how we need to understand the company.



OceanJ on 08 January 2013

There seems to be enough interest talking about the business side of Nintendo so I started a "Nintendo Investors Thread" to centralize the discussion for anyone interested.



OceanJ on 08 January 2013
Tarumon said:
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.

 

Back when they "downwardly" revised back in 3rd quarter, their revised numbers were still...unattainable in my eyes. Net Sales of 800 billion Yen by year end when 6 months to date to 9/30/12 was 200 billion.  Some of you are better at recalling history than I am, when has Nintendo ever achieved a 2nd Half vs 1st Half Net Sales multiple of 3 to 1?

I checked some historical numbers from the last 6 years...and you're right, they've never had a Net Sales increase ratio equivalent to 200 Billion Yen in Sept. to 800 Billion by end of March.

Here's the numbers:

  • 2006: 298,817; 966,534  multiple of 3.23
  • 2007: 694,803; 1,672,423 multiple of 2.4
  • 2008: 836,879; 1,838,622 multiple of 2.19
  • 2009: 548,058; 1,434,365 multiple of 2.62
  • 2010: 363,160; 1,014,345 multiple of 2.79
  • 2011: 215,738; 647,652 multiple of 3
If you'll notice, the multiple gets the highest for years when Nintendo products are selling the lowest.  The multiple got to its lowest point at the height of Wii sales, and risen since.  Last year it was at 3, so we can safely bet the multiple will be above 3.
Given that 2011's Net Sales came in at 647,652 Billion...and for FISCAL YEAR 2011 Nintendo sold:
  • 14,285,223 3DS's
  • 10,627,000 Wii's
  • 6,702,658 DS's
  • = 31,614,881 Hardware Unit Sales
And FY2012 is looking to shape up like
  • 4.5 - 5 Million Wii U's 
  • 14.75 million 3DS's
  • 4 - 4.5 Million Wii's
  • 3.3 Million DS's
  • = about 27.3 million Hardware Unit Sales
We are looking at approx  3 - 4 Million fewer total hardware unit sales. :(   BUT...Nintendo's software Net Sales should go up this year.

So Nintendo has zero chance of doing 800B in Net Sales for Fiscal Year 2012 as projected, but it should be higher than 2011 despite fewer total Hardware Units sold.  So we're looking at between 650B - 700B Net Sales.

In 2011 Nintendo LOST money on that 646B in Net Sales.

The big big question of the day is, will they be profitable this year on their 650-700 Billion on the year?  They've projected 6Billion in profits...but that was on 800B in Net Sales...

Answer: It's going to be damn, damn close. And they have a chance of not being profitable 2 years in row.

In their favor:

  • 3DS Hardware's been selling at a profit since September 2011.  The majority of units sold during the Holidays.
  • The Yen though still fairly strong for Nintendo has been weakening in their favor, especially over the Holidays translating to higher profits.
  • More Net Sales in Software, by far the more profitable between it & hardware adds to profitability

But 100 Billion less in Net Sales than they projected...

Too close to call.  I am hoping for some kind of uptick in the stock to approach $14 / share after Q3 numbers come in, praying the pure Q3 profitability gives hope to investors so the stock can climb a bit...then I'm selling a good chunk of my stock, because looking at these numbers I really think we haven't hit bottom yet by a long-shot.