Why Nintendo Shares are Wilting Despite Strong Wii U Sales

Why Nintendo Shares are Wilting Despite Strong Wii U Sales

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In its first week of sales in Japan, Nintendo (NTDOY) sold 300,000 Wii U units. The console is being sold for around $319 for the basic model, and $382 for the premium black model in Japan. Alongside sales of the device, Super Mario sold 170,000 units, while Monster Hunter sold 110,000 units. Initial sales represent the seventh-best hardware launch in Japan, but still pales in comparison to the original Wii launch (370,000 sold).

In the United States, Wii U sold 400,000 units in its first week of availability.

Investors are punishing Nintendo, whose shares are down 26.1% in the 1-year period:

Investors are taking a short-sighted approach to the potential in console gaming. They fail to understand that initial sales do not correlate to the overall success for the Wii franchise. When Sony’s (SNE) Playstation Vita sold well initially, it did not translate to a follow-through in unit sales or games for the device.

Recent Developments: Competition from Nike

Nintendo’s Wii U FitMeter is scheduled to be launched in early 2013. The exercise game will have a separate pedometer, whose data may be transferred to the console.

Imitation is the highest form of lattery. Nike (NKE) is developing a virtual game, through Nike+ Accelerator. Nike’s virtual game works by motivating users to exercising. Data collected from motion is collected. Users are rewarded with NikeFuel points.

Analysis

The selling point of the Wii U will be its entertainment for large groups of people. Consumers who use the device to kick-off entertainment at their parties will look to Nintendo’s Wii U. At other times, the device supports Hulu+, Netflix (NFLX), Amazon (AMZN), and Google's Youtube (GOOG). As more and more apps are developed for the console, interest for it will grow. Nintendo shares are not for everyone. They are for investors who have patience and a mid- to long-term time horizon.

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12 Responses to “Why Nintendo Shares are Wilting Despite Strong Wii U Sales”

  1. johnjeremyvines says:

    Could be a buying opportunity.

  2. so much potential

  3. I am sworn off shares…

  4. /v/ trading says:

    People are hoping for lighting to strike twice like the Wii, it aint going to happen. It will be dead in the water once Microsoft and Sony release their new consoles.

  5. I just bought the Wii U and I think it is a quality console that has yet again let the market with innovation. Xbox and PS3 sales are down because everyone who wants one has one and the next gen is less than a year out. Nintendo has a HUGE loyal following and I think they will be successful this gen. What made the Wii so big was non-gamers bought it and the price point was much lower. This generation it is looking like a true next generation platform with solid hardware, fantastic graphics and some good third party software support.

    • rich says:

      Well, I agree with you Uber Geek! Everyone who has a Wii U (including me) really likes the console. The only people I heard that do not like the system does not have it. I have Zombie U with mine. I don't think the touch screen helps me play that particular game any better (first person) as opposed to a regular controller, but it definitely gives a more unique more authentic experience. For example, you have to look down at it to check the radar if you want to know what enemies are coming at you. Does taking your eyes off the TV put you at a disadvantage as apposed to having a radar at the corner of your screen? Probably. But, that is the point and that's what makes the game more intense. But, those who want to dismiss this console based on 'ew, it's Nintendo' and 'well the graphics aren't any better….' it is their loss. 300K units at $350 for Wii U as apposed to 380k units for Wii @ $250 on launch is better for the company, anyways.

  6. interesting figures and good luck wii :) !

  7. pagini web says:

    Wii U de Nintendo FitMeter está programado para ser lanzado a principios de 2013. El juego de ejercicio tendrá un podómetro independiente, cuyos datos pueden ser transferidos a la consola.

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