Gaming Nintendo Faces Trouble Ahead

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Nintendo (NASDAQOTH: NTDOY.PK) has long been one of the chief players and innovators in the videogame industry. The company has been credited with bringing the videogame market back from the verge of complete collapse and maintains one of the most iconic and valuable casts of characters in the medium.

It is my position that Nintendo stock is currently overvalued at a price of around $17. Nintendo has seen an rise in the valuation of its stock over the course of the last year, however there are many indicators suggesting that such positive momentum is unsustainable and that its stock price will drop.

The company’s rising stock price has been driven largely by the solid performance from its 3DS handheld. The system has been putting up good numbers in all of the major territories, securing the top spot on June’s NPD charts and topping the Japanese trackers on a weekly basis. Recent releases such as Animal Crossing and Luigi’s Mansion 2 have shown strong performance and signs of franchise growth. The value of Nintendo has climbed over 25% over the last year. The last month in particular has shown incredible growth for the company. Yet, if the stock is climbing in response to good sales from the 3DS and key Nintendo franchises, such action appears shortsighted.

Nintendo’s Wii U console stands to become one of the biggest flops the company has ever released and has the potential to be the last home console it ever produces. After a decent launch performance, sales of the console have slowed to a veritable crawl. While hardware sales have been undeniably disastrous, it is software sales that show that the console has no future. In the sixth months that the Wii U has been on the market in the UK, total software sales tallied only 179,000.

More here: http://beta.fool.com/keithnoonan/20...-trouble-ahead/41614/?source=eogyholnk0000001

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I think this article highly underestimates the power of the portable. These same people were saying the same thing when 3ds came out. If Nintendo would come through with some 1st party title support for the Will U, that would start selling consoles.
 
Not sure about that TH, I think too many people view the Wii U as an unnecessary upgrade for the Wii! The sales of the Wii U units will simply trickle in as the titles keep coming.
 
What about when Animal Crossing comes to it? Or Super Smash Brothers? If they could come up with some Titles for Christmas they could start selling. The 3DS has not been rocking the charts for very long. It took time for that one to catch on too.

Also, every time I hear Nintendo's in trouble because it is not getting a madden, big deal nobody is getting Animal Crossing cept Nintendo.
 
The best title for Wii was supposed to be LoZ Skyward Sword but I found that game to not live up to the hype. Nintendo's Wii series won't survive unless the exclusive titles blow the audience away via Pikmin 3 beating Pikmin 2 as a whole, and a new LoZ beating one of the God games Ocarina of Time
 
People said this after nintendo 64 went against playstation and lost hard. Nintendo is on a winning streak again as a major player in the industry. The reason nintendo is so vulnerable to these claims is that they dont have numerous other industries to rely on if things go bad (unlike Microsoft or Sony)
 
People said this after nintendo 64 went against playstation and lost hard. Nintendo is on a winning streak again as a major player in the industry. The reason nintendo is so vulnerable to these claims is that they dont have numerous other industries to rely on if things go bad (unlike Microsoft or Sony)


They also rarely lose money on hardware. The Wii U is not a powerhouse like the latest beast consoles coming out and does not cost as much to manufacture. They don't lose as much money as people who write this article think on hardware.

Of course, the guy in the article is just talking about the big stock price increases that are happening and he does not think they will maintain not that Nintendo will fold up.
 
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