Nintendo (NTDOY) recently announced the release dates (November 18) of its new gaming console, the Wii U, and Nintendo TV, an accompanying video streaming service. Plagued by declining earnings in the past year, Nintendo’s management believes the launch will revitalize the firm’s product portfolio and boost revenues.
Still Reaching a Tipping Point
Nintendo’s share price has fallen 12% year-to-date and 75% since the release of the Wii. Gearing up for a revival, the firm is positioning itself to take advantage of holiday season sales and gamers’ anticipation for a new console. Analysts predict Wii U sales may reach 7 million by March of next year.
Despite these predictions, and strong presales, the buzz for the Wii U has not quite reached the general public – once it does, however, definitely keep a lookout for Nintendo’s share price. It would also be wise to keep a look out for Netflix (NFLX), Amazon (AMZN) and GameStop Corp (GME), companies that would directly benefit from a successful Wii U release.
Why the Wii Wins Over Casual Gamers
The Wii U’s touch-screen controller, or “GamePad,” will add another dimension to the gaming experience by allowing users to control more aspects of game play from their controllers. As an added perk, the Wii U will be bundled with Nintendo TV, an online video streaming service compatible with Hulu, Netflix and Amazon. The GamePad and Nintendo TV will combine for a more integrated “media ecosystem;” users, for example, will be able to stream a basketball game on Nintendo TV while checking statistics on the Wii U GamePad at the same time.
Business Section: Investing Ideas
Nintendo plans to release the Wii U on November 18th, giving the firm a head-start on Sony (SNE) and Microsoft’s (MSFT) new console introductions. Since 2009, the Wii has seen its market share drop from 44% to 22%, as gamers have gravitated towards the Xbox 360 and PlayStation 3 consoles. In addition to poor Wii sales in recent years, disappointing reviews for the Nintendo 3DS forced the firm to slash prices and subsequently absorb heavy losses on the product. The Wii U is expected to be Nintendo’s saving grace.
Do you think the Wii U will pick up among the casual gamer masses (especially those who might feel overdue for a new gaming system)? If so, take a look at Nintendo’s share price movement, which has rebounded nicely with the market and increased hype for the Wii U. It could have much more upside to price in..
Written by Sherif Hamid