That was fast. Nintendo’s stock is being downgraded by KBC Securities Japan to "hold" from "buy" because of fears that demand for the DS portable game player, and the red-hot Wii console, will decline over the next year.

KBC said sales in the U.S. and Europe are “peaking” after a year of growth, and that the weakening dollar will cut into margins for the Japan-based Nintendo.

Reasonable enough to assume that at some point Wii sales will peak -- even though Nintendo has done a great job at marketing its machines beyond the core gaming audience, at some point most people who want one will have one.

But the gaming business has two cycles: Console sales and game sales. And as console sales peak, game sales should ramp up. And here Nintendo should be in the best shape compared to competitors Sony (SNE) and Microsoft (MSFT). It owns many of its bestselling titles (Wii Play, Super Mario Galaxy, Super Smash Bros. Brawl), and has several more anticipated inhouse games (Mario Kart Wii, Wii Fit, etc). coming up. What are we missing? Let us know in comments.

http://www.alleyinsider.com/2008/3/nintendo_gets_downgraded_have_wii_sales_peaked_

Please Note the thread title is the title of the article. 

Time will tell. It remains to be seen just how much the U.S. video game market will be affected.

There were plenty of analysts that had poor ratings on Nintendo while the stock tripled and sales exploded. I don't trust anything these people say. I should have bookmarked it, but there was a link showing how accurate their future projections were. Hopefully someone will repost it.

Yeah I see the stock going up for a while as well.

It's pretty much just the weak dollar and the overall weak global market that's been holding the stock down. DS has declined in Japan so far (could be temporary with few releases lately) but other than that everything is up this year, and game sales are even better.

Stock analysts know next to nothing about video game sales. This kind of thing is where Pachter actually is usually correct and makes his money, since he's the only stock analyst I know of who specializes in the video game industry (among other electronics I think).

the stock peaked, not Wii's demand.

the stockmarket isn't exactly doing great anyway. :P

I see a bunch of big N boys coming to the rescue...

*puts hear in ground then runs for life*

This probably has a lot to do with the American and Japan Economy's less then great position over the last little while...

Thanks to the American economy. But really, stocks sometimes do not really reflect the state of the actual business. The average person has no idea about how well Nintendo will do. All the know is that it sold out all of last year and cant really do any better than that unless they start creating more. Stock prices are what the public perceives the companies future to be. Whether it be true or not.

Seriously, I think wii should peak during this year with wiis widely available during the remainder of its cycle and very strong sales till its replaced by Wii 2.