I've held Nintendo stock for several years, but now i'm wondering if it's time to sell. I wanted to get your opinions on Nintendo as a business. Although Nintendo makes money on everything they sell, that's already priced into the stock. The stock price will only go up if they do better than they are doing right now. So what do you think? Does Nintendo have an upside right now? I say "no" for the following reasons: - It's hard to do better than they've already done - Wii / DS sales are starting to fall as this console cycle is moving into the second half - Even if a SuperWii were on the horizon, i doubt Nintendo's current casual-gamer market will care much. "What will it do that i don't have now?" they will say. - The current software offerings for the Wii continue to be mostly dreck, let's be honest. The only thing in the pipe is Mario Galaxy 2 and Metroid and handfull of smaller titles. Metroid has never been a big seller. - Nintendo stock price has been stagnant for a long time and has not recovered from it's fall, unlike the rest of the general market. So should i keep what i have or sell it?

Out of the three active consoles, the Wii is easily the most annoying from the developer point of view.

Microsoft is a software company. They focus on making awesome development tools but have problems when it comes to hardware. However, they have shown noticable improvement in the hardware area.

Sony is a hardware company. They focus on making the hardware awesome but don't understand the ramifications of their hardware design on the software side of things. They are learning from their mistakes and getting better in the software area.

Nintendo is a family-focused game company. They focus on the end user and totally suck at everything else (good hardware OR good development tools). I haven't noticed any improvement in the stuff they suck at, but maybe other people have. Let's get some anecdotal evidence up in this piece.


Fortunately for Nintendo, the customers still buy their console, so it doesn't really matter how crappy their development tools are as long as one or two games come out to entice people to buy the console.

Unfortunately their future is up in the air. What do gamers want next? Virtual Reality? Brain-Computer Interfaces? Where is the next gimmick for Nintendo to capitalize on - the gimmick that they, as a company, will be technically competent enough to pull off?!

[Edited by - Nypyren on March 11, 2010 9:04:33 PM]

Quote: Original post by Nypyren
Let's get some anecdotal evidence up in this piece.

Yep, would develop for an XBox over a PS3 over a Wii any day :/

However, the Wii does have one thing: When you implement dynamic normal mapped reflective/refractive water on an XBox it's not that special, but when you implement it on a Wii you feel like a true wizard!! =D

Quote: Original post by Hodgman
However, the Wii does have one thing: When you implement dynamic normal mapped reflective/refractive water on an XBox it's not that special, but when you implement it on a Wii you feel like a true wizard!! =D

That's true. It gives down-to-the-metal programmers like myself a chance to implement things we never get to work on, like... stack overflow detection!

From a Stock point of you I'd say yes now is the time to sell. DS and Wii hardware is starting to reach saturation point so less consoles are being sold.
Third party developers who initialy set up shop due to the low cost of development for the Wii and DS have started to go out of buisness.
Recent publisher feedback from various games conferences has indicated that one or two of the larger publishers are planning on dropping the Wii and DS from their list of SKUs this year.
Retailers (at least in the UK) are starting to give Nintendo games less shelf space as they realise that the games just don't sell as well as other platforms.

Now you could hang on to your Stock in case Nintendo plan on releasing a new Console but, even if they do I can't see it making a significant impact on their current share price.

I think Nintendo is a very successful toy compagny. Dont try to analyse it as a game compagny, because its not and its never really been so. But to start, what are the fundamentals ?

First off, I wouldn't come to a game forum asking if you should sell or keep stock in anything. I would go to a wealth management professional who is trained to look at long term trends and can fully evaluate Nintendo's portfolio. Sorry for that tiny rant, now back to other question:

What do I think of Nintendo as a company?

I think they're great. They've been able to take part in both the hardware and software side of the game industry since roughly 1977. That's an incredible feat. Has everything Nintendo's come up with been successful? Absolutely not. Just look at the Virtual Boy. :P But Nintendo has always been able to sidestep these mistakes and come out with something next that captures the attention of the public and gets them to buy. Personally I thought the Nintendo Wii was going to be a total flop before it came out. It was less powerful... or at least somewhat on par with the first Xbox. Motion controlled games? Yeah... that wont last long. Well I (along with many others) were completely wrong.

So Nintendo may rock it out for decades to come, or they may be cresting now and fade out over the next few years. It's really hard to tell. If you told me back during my late elementary - early middle school years that Sega would drop out of the console race I would have beaten you up. Then stole your lunch money! That's my take anyway.

Nate

Quote: Original post by Steadtler
I think Nintendo is a very successful toy compagny. Dont try to analyse it as a game compagny, because its not and its never really been so. But to start, what are the fundamentals ?

What? No offense but your comment doesn't make any sense at all. If they're not trying to be a game company and haven't been one then why have they made all of these consoles? Not too mention some of the most recognizable characters in video game history! (Mario.... Link..... just to name two)

Quote: taken from Wikipedia
Nintendo Entertainment System
The Nintendo Entertainment System
Main article: Nintendo Entertainment System

The Nintendo Entertainment System (NES) is an 8-bit video game console released by Nintendo in North America, Brazil, Europe, Asia and Australia. In Japan, it is known as the Famicom (Family Computer). Selling over 61 million units worldwide,[2] the NES helped revitalize the video game industry following the video game crash of 1983 and set the standard for subsequent consoles in everything from game design to business practices. The NES was the first console for which the manufacturer openly courted third-party developers. Many of Nintendo's most iconic franchises, such as The Legend of Zelda and Metroid were started on the NES.

Nintendo of Japan continued to repair Famicom consoles until October 31, 2007, attributing the decision to discontinue support to an increasing shortage of the necessary parts.[3][4][5]
[edit] Super Nintendo Entertainment System
The Super Nintendo Entertainment System (North American version)
Main article: Super Nintendo Entertainment System

The Super Nintendo Entertainment System, also known as Super Nintendo, Super NES or SNES, is a 16-bit video game console released by Nintendo in North America, Brazil, Europe and Australia. In Japan it is known as the "Super Famicom" (Super Family Computer). In South Korea, it is known as the Super Comboy and was distributed by Hyundai Electronics.

The SNES was Nintendo's second home console, following the Nintendo Entertainment System. Whereas the earlier console had struggled in the PAL region and large parts of Asia, the SNES was a global success, albeit one that could not match its predecessor's popularity in Northeast Asia and North America—due in part to increased competition from Sega's Mega Drive console (released in North America as the Genesis). Despite its relatively late start, the SNES became the best selling console of the 16-bit era, selling over 49 million systems worldwide.[2] The SNES library is known for upgrading some of Nintendo's most famous franchises, and making them games even more criticaly aclaimed, such as Super Metroid, The Legend of Zelda: A Link to the Past, Final Fantasy IV and VI, Donkey Kong Country and Super Mario World, as well starting some popular franchises such as EarthBound and Mega Man X.
[edit] Nintendo 64
The Nintendo 64
Main article: Nintendo 64

The Nintendo 64, commonly called the N64, and codenamed Ultra 64, was Nintendo's third home video game console for the international market. It was released with three launch games in Japan (Super Mario 64, Pilotwings 64 and Saikyo Habu Shogi) and two in North America (Super Mario 64 and Pilotwings 64). PAL regions also had three launch titles (Super Mario 64, Star Wars: Shadows of the Empire and Pilotwings 64) with Turok: Dinosaur Hunter delayed until three days after launch. Other key games included Donkey Kong 64, Diddy Kong Racing, Banjo-Kazooie, the two games in The Legend of Zelda series, GoldenEye 007, Mario Kart 64, Super Smash Bros. and Star Fox 64. The Nintendo 64 sold 32.93 million systems.[2]
[edit] Nintendo GameCube
The Nintendo GameCube
Main article: Nintendo GameCube

The Nintendo GameCube is Nintendo's sixth generation game console, the same generation as Sega's Dreamcast, Sony's PlayStation 2 and Microsoft's Xbox. Until the console's unveiling at SpaceWorld 2000, the design project was known as Dolphin—this can still be seen in the console and its accessories' model numbers. The GameCube is the most compact sixth generation console. The GameCube is Nintendo's first game console to use optical discs rather than game cartridges. An agreement with the optical drive manufacturer Matsushita led to a DVD-playing GameCube system named the Panasonic Q, which was only released in Japan. The Nintendo GameCube has sold 21.74 million units as of December 31 2009.[2]
[edit] Wii
The Wii
Main article: Wii

The Wii (pronounced /ˈwiː/, like the word "we") is Nintendo's seventh-generation video game console. The system's code name was "Revolution", and as with the Nintendo GameCube, this reference appears on the console and its accessories.

The major feature of the Wii console is the console's wireless controller, the Wii Remote, that may be used as a handheld pointing device and can detect motion and rotation in three dimensions. The controller comes with a Nunchuk accessory which provides additional controls, including more motion sensing. The controller also contains a speaker and a rumble device to provide sensory feedback, and can be used to turn the console on and off. The console also features a stand-by mode entitled WiiConnect24, enabling it to receive messages and updates over the Internet while consuming little electrical power. The console is bundled with a game, Wii Sports. In Japan, Wii Sports is not included with the console, and is a standalone title. As of March 31, 2009, the Wii has sold 50.39 million units worldwide."1". [1]. http://www.nintendo.co.jp/ir/pdf/2009/090507e.pdf#page=23. The Wii, like the Nintendo GameCube, is the smallest and most compact system in its generation. However, the Wii does not have the ability to match certain technical aspects of its competitors of its generation, such as high graphical complexity using hundreds of millions of polygons per second, Pixel Shader Model 3.0 and high-definition resolution (the Wii can only achieve 480p, as opposed to the Xbox 360 and PlayStation 3, which can achieve 1080p).

On December 15, 2006, Nintendo announced it would offer to replace wrist straps for 3.2 million Wii controllers. Consumers reported they were breaking during game play.[6]

By April 2007, the Wall Street Journal declared Nintendo had "become the company to beat in the games business" with the Wii outselling its home system rivals and overshadowing the better selling Nintendo DS portable.[7] Nintendo's profits were up 77 % on the fiscal year due to Wii and Nintendo DS sales.[8]

Nintendo CEO Satoru Iwata has urged Nintendo not to get "complacent" due to the early success of the Wii. He continued by saying it was important "not to lose internal momentum and energy". Iwata urged Nintendo to continue its momentum.[9]

Nintendo has sold 67.45 million Wii consoles through Dec. 31st 2009. [10]

Quote: Original post by nsmadsen

Quote: Original post by Steadtler
I think Nintendo is a very successful toy compagny. Dont try to analyse it as a game compagny, because its not and its never really been so. But to start, what are the fundamentals ?

What? No offense but your comment doesn't make any sense at all. If they're not trying to be a game company and haven't been one then why have they made all of these consoles? Not too mention some of the most recognizable characters in video game history! (Mario.... Link..... just to name two)

*copy paste from wikipedia*

First, take a deep breath. Then, hear this: game console makers like Sony and Ms and others in the past make game platforms, often at a lost, and then get most of their money by getting a % of every game sale on their consoles. Their customers buy the console to run the game software on it.

Nintendo however, runs with a toy-maker mentality: They build brands to sell toys related to that brand. They make money off the hardware. They sell new toy accessories to use with the bigger toy you bought. Although some of their customers are looking for a game experience, they make most of their money out of people looking for a toy experience.

So if you want to analyse Nintendo's business, I suggest to look at it as a toy cie. For example, because they are more of a toy maker, the power of their brands and their ability to come up with a new toy-of-the-year every Christmas is more important than, say, their weak attachement rate.

Quote: Original post by Steadtler
First, take a deep breath.

Perhaps my post read that I was angry or offended. I wasn't, just more confused by your logic.

Quote: Original post by Steadtler
Then, hear this: game console makers like Sony and Ms and others in the past make game platforms, often at a lost, and then get most of their money by getting a % of every game sale on their consoles. Their customers buy the console to run the game software on it.

True in a way but both Sony and MS have their own titles that they develop and publish as well as supporting 3rd party titles.

Quote: Original post by Steadtler
Nintendo however, runs with a toy-maker mentality: They build brands to sell toys related to that brand. They make money off the hardware. They sell new toy accessories to use with the bigger toy you bought. Although some of their customers are looking for a game experience, they make most of their money out of people looking for a toy experience.

You're not really making a solid argument here as both Sony and MS are currently developing accessories to enhance or add more functionality to their systems and the games (both 1st and 3rd party) played on their system. Just consider the Project Natal and PS3 Motion controller. Likewise both Sony and MS have their own brands which they draw out to get as much longevity and monies from. God of War and Halo being just two for the two consoles. Finally both the MS and Sony consoles have gone through several iterations.

Quote: Original post by Steadtler
So if you want to analyse Nintendo's business, I suggest to look at it as a toy cie. For example, because they are more of a toy maker, the power of their brands and their ability to come up with a new toy-of-the-year every Christmas is more important than, say, their weak attachement rate.

I would argue that both MS and Sony have been looking for ways to beef up their sales and figure out how to move more units, especially at Christmas time. Plenty of first party games come out near the holidays and Nintendo, MS and Sony have also bundled up gear and made special versions of their systems, etc. I don't really see Nintendo as acting as more of a toy company.

Perhaps the fact that Nintendo has a good deal more "children" games and is often views as more a casual gamer system makes you feel that Nintendo itself is more of a toy company. I see it more as each major in the industry is looking for a niche to fill in hopes of being successful.