Nintendo Stock Down 40%, Future Hinges On Wii U

Today, the Big N slashed their FY 2012 earnings guidance by 82%. They also announced a huge price cut on the 3DS system from $250 to $170. These are the moments that value investing is made for. Was I wrong to buy NTDOY, Nintendo’s ADR, at $33/share? Well it is trading below $20/share today, so the answer has to be yes. Was I wrong to buy Nintendo at $28/share? Yes again. Was it wrong to buy Nintendo at $22/share? Time will tell. My investment time horizon on Nintendo is 3-5 years and the case for revenue growth will become more compelling as the Wii U rolls out. This coupled with more releases of quality 3DS titles could stem the bearish tide.

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donniebaseball2579d ago

We'll see how 3DS bounces back this holiday, but yeah it's critical that Wii U get off to a flying start or they might return to their GameCube like days of being irrelevant.

fluffydelusions2579d ago

NES/SNES were there best systems IMO.

disturbing_flame2579d ago (Edited 2579d ago )

i also loved first gameboy.

WhiteLightning2579d ago

I wonder what would happen to Nintendo if the Wii U fails

Like a "What if" scenario

qface642579d ago

they would just move on and have to try again harder

neither the n64 or the GC were hot and that was in a row

donniebaseball2579d ago

I think the difference this time though is the games industry is very, very different than it was in the N64 or GameCube days. If Wii U sold very poorly, Nintendo would be in bad shape. Content is king, however, and they could become a hugely successful third party. Heck, they might even finally support phones and Facebook then. Their IP could be all over the place.

qface642579d ago

they were making less money during the N64/GC era than they are now so i doubt they are going to be crippled anytime soon

catguykyou2579d ago (Edited 2579d ago )

The difference between the n4g and GC generations is a matter of money. The success Nintendo had between the SNES to N64 to GC was far more gradual than DS > 3DS. The DS was a run away success. The 3DS has been extremely slow compared. Nintendo is publicly traded company. They answer to their stock holders. They stock just dropped 40%. This is a vast drop compared to previous slower gens and far more of a shock to the system.

I would compare it to this. Imagine being CEO of a company making 250K a year. Now imagine, you decide to take a new job and without knowing it beforehand, you now only make 40K a year. Your family is going to notice and they prob wont be happy with the changes that will need to be made.

If you were mirror the same drop across an entire stock market, they would call this a stock market crash and this would normally lead to a economic depression.

Nintendo isn't out of the game yet, but if Wii-U also fails to take off, they really could be in trouble.

BattleAxe2579d ago

Nintendo's stock just dropped 40% which is a massive drop, and investors have got to be getting nervous. If the WiiU fails, then I think they will turn into the same kind of company that SEGA turned into after their failures. I think they would get out of home consoles entirely, and just make money on selling their games as a 3rd party developer. I'd be willing to bet that they would remain in the handheld market since that has arguably been their strongest selling product.

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zerocrossing2579d ago

Then I mite have to give up gaming...

EasilyTheBest2579d ago

If the Wii U fails along will come Microsoft with a load of money so they can finally get the Japanese market...

EYEamNUMBER12579d ago

microsoft once offered 25 billion for nintendo when the GC didn't do so hot even back then they passed

Inside_out2579d ago (Edited 2579d ago )

This is HUGE and shows that the shareholders are losing patience with Nintendo.

The price cut will not be enough. Expect the hammer to fall. Nintendo waited to long to react to market conditions.

They really needed the Wii-U to launch this year but their stupidity and more importantly...GREED, got in the way as they continue to sell their severely out dated gaming devices.

For the bargain hunters out there it will be a great time as Nintendo starts dropping prices to where they should of been in the beginning.

EYEamNUMBER12579d ago

nintendo waited to long to react to market conditions? how is 4 months too long?
im surprised they reacted that fast no one was expecting a 3DS price cut for quite some time

catguykyou2579d ago

One could argue that the price should of been lower from the beginning. The market has been bad for years now. Nintendo decided on the price of the devise a good while before they released it. So yes, it could be said, "they waited to long to react to the market."

RockmanII72579d ago (Edited 2579d ago )

The N64 was Nintendo's last great console, at this point I wouldn't mind them becoming a publisher like Sega and making Mario and LoZ games for Sony and MS. It would just be one less console I'd have to buy.

Cpt_kitten2579d ago

"future hinges on wiiu"

or they will go back up along with sales with the next mario title

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