Ground Rules

• This is about Nintendo and no one else, so don't mention any other companies unless absolutely necessary. 
• Try to use facts, figures, and articles if possible 
• There will be basic economics in this thread. If you don't like that or don't want to learn, then hop along and find another thread. 

So....Nintendo have a serious problem on their hands and I would like to know what people think about it and how they think Nintendo are going to deal with it. 

The problem is that it looks like Nintendo are going to miss their sales target for the WiiU AFTER it was cut by ~ 20%. By March 2013 they were hoping to have sold 5.5 million units of the WiiU, yet this was reduced to 4 million units after looking at current sales figures, and it seems that they will not hit this target by some margin. 

For anyone familiar with how public companies works, if a company gets a sale figure wrong, this is a huge problem - one that normally leads to someone at the top being fired. This then leads to a large drop in share price and of course, financial problems for the company. To get it wrong twice? Well, this just doesn't happen. 

My prediction is that there will be a huge Ceo/President Vs Share holders fight, which will result in the blitzing of the current board and a reshuffle of all major management at Nintendo. If not, everyone will dump their stock and Nintendo will have serious financial issues (unless it has huge funds to fall back on).

Now you might be thinking "But wait kind Sir! The Wii was a huge success so surely Nintendo can ride that wave a bit longer until the WiiU picks up speed?!". Sadly not this time. Since 2008 Nintendo have seen a 82% drop in their share price, so unless their money is sitting cosy drinking pina coladas in the Cayman Islands, Nintendo are going to have to be pretty flexible on this and go with their share holders.

So, what do you all think?

Sources

http://uk.finance.yahoo.com/echarts?s=NTO.BE#symbol=nto.be;range=20071019,20130218;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

http://www.forbes.com/sites/davidthier/2013/01/30/nintendo-cuts-forecast-on-weak-wii-u-sales/

(Some hardcore sources right there!)

That's weird, I recall Nintendo missing their targets for the 3DS and Wii pretty much every time they've given estimates the past couple of years. In addition, another major company I won't name as per your rules isn't coming anywhere near meeting their sales targets.

They have a successful handheld that can offset losses on the Wii U. It is defiantly a serious situation but not as bad as you make it sound. Also that other company that shall not be named has continuously dropped sales predictions of one of their products and nothing major in management has happened.

It is interesting that you are saying that Nintendo can't really count on wii and ds money, but wasn't it just last year that an article came out that Nintendo had 10.8B US$ in the BANK. This means, that's without counting all of their franchises, buildings, etc. They are good to go for years even if they fail miserably which we all know that wont happen. Or atleast, in the handheld market.

Sources?

Also would this explain the 80% drop in share price?

Erm, the "other company" had a brand new CEO put in who is blitzing the hell out of it, hence the 10% boost in share price.

Sounds like Nintendo should have went with more saggy balls on their Wii U estimates.

Actually, that 10% boost in share price had nothing to do with the CEO's brilliant decisions in the company. It had to do with selling that building in NYC for a billion dollars. Check their stock, it went up right after they sold the building.

I think this has largely been already priced into the stock but I would expect it will have a drop when full year is announced. 3DS and software are doing well although I didn't check to see how that stacks up against their latest projections. Keep in mind the market cap right now is only about $1B over the cash value of the company. It's hard to go down a whole lot from that especially with the IP they own.

The company has $12B in cash/cash equivalents and no debt. I think they can ride out this storm.

I don't think Japanese companies operate in the same way as Western companies do. There hasn't really ever been a hostile takeover in Japan that's succeeded as far as I could find in my limited research. So a proxy fight from the shareholders seems unlikely. Nintendo's management will look bad but I highly doubt it ends in anything other than promises of how they plan to turn it around.

I wish it was selling better. Every time I see a WiiU in the store, I really really want one, but can't afford one cause they're so expensive here :( .

i don't think so. i think Ninty will drop price soon with no shuffle, and well that's were my thoughts end.