Author Topic: NTDOY - Nintendo  (Read 73039 times)

alwaysinvert

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Re: NTDOY - Nintendo
« Reply #20 on: June 17, 2012, 03:24:08 AM »
Well, Wii Sports/Play was a new brand available at the release of the Wii and Sports is now the most sold video game ever, selling almost twice as much as the runner-up (the original Super Mario Bros. from 1985).

Not really fair to compare Wii Sports to any other game, since it was bundled with every Wii console. If you bought Nintendo's platform, you couldn't not buy Wii Sports.
Super Mario Bros was bundled too. Wii play is the most sold non-bundled game of all time.


leftcoast

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Re: NTDOY - Nintendo
« Reply #21 on: June 17, 2012, 09:07:59 AM »
Well, most copies of Wii Play were actually sold bundled with the Wii Remote controller. The Wii console shipped with only one Wii Remote, so if you wanted to play with friends you needed to buy a second controller. Your choice was to pay $50 for the controller by itself, or for an extra $10, you could get it bundled with Wii Play. So the game wasn't quite given away, but it was pretty close.

As "brands," I don't think Wii Sports or Wii Play or Wii Fit are nearly as valuable as Nintendo's other franchises. They are products designed to teach people how to use some new piece of hardware. I'm sure a similar type of game will ship with the Wii U, to teach people how to use the tablet controller.

It's been a very long time since Nintendo successfully launched a new franchise based on original IP. I think the last one was Pokemon in 1996.

alwaysinvert

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Re: NTDOY - Nintendo
« Reply #22 on: June 17, 2012, 09:46:18 AM »
Well, most copies of Wii Play were actually sold bundled with the Wii Remote controller. The Wii console shipped with only one Wii Remote, so if you wanted to play with friends you needed to buy a second controller. Your choice was to pay $50 for the controller by itself, or for an extra $10, you could get it bundled with Wii Play. So the game wasn't quite given away, but it was pretty close.

As "brands," I don't think Wii Sports or Wii Play or Wii Fit are nearly as valuable as Nintendo's other franchises. They are products designed to teach people how to use some new piece of hardware. I'm sure a similar type of game will ship with the Wii U, to teach people how to use the tablet controller.

It's been a very long time since Nintendo successfully launched a new franchise based on original IP. I think the last one was Pokemon in 1996.
Nah, on this point I think you are wrong even if you don't consider Wii Sports/Play games proper IPs (with Wii Sports Resort also selling humongous amounts, although admittedly also mostly in bundles with the upgraded controller).

Nintendo has still released new IPs like Nintendogs (24m copies), Brain Age (34m copies counting both games in the series), Animal Crossing (11.5m for the DS version and a couple million more each for the N64, GC and Wii installations) and Pikmin (some 2-3m units, which were great numbers for GC games). They also relaunched the old IP Metroid to great sales figures.

Yes, they still depend heavily on Mario, but to some extent I think stating that as a big weakness is somewhat akin to wondering what the heck Disney would be without Mickey Mouse and Donald Duck. 

leftcoast

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Re: NTDOY - Nintendo
« Reply #23 on: June 17, 2012, 10:59:29 AM »
Well, most copies of Wii Play were actually sold bundled with the Wii Remote controller. The Wii console shipped with only one Wii Remote, so if you wanted to play with friends you needed to buy a second controller. Your choice was to pay $50 for the controller by itself, or for an extra $10, you could get it bundled with Wii Play. So the game wasn't quite given away, but it was pretty close.

As "brands," I don't think Wii Sports or Wii Play or Wii Fit are nearly as valuable as Nintendo's other franchises. They are products designed to teach people how to use some new piece of hardware. I'm sure a similar type of game will ship with the Wii U, to teach people how to use the tablet controller.

It's been a very long time since Nintendo successfully launched a new franchise based on original IP. I think the last one was Pokemon in 1996.
Nah, on this point I think you are wrong even if you don't consider Wii Sports/Play games proper IPs (with Wii Sports Resort also selling humongous amounts, although admittedly also mostly in bundles with the upgraded controller).

Nintendo has still released new IPs like Nintendogs (24m copies), Brain Age (34m copies counting both games in the series), Animal Crossing (11.5m for the DS version and a couple million more each for the N64, GC and Wii installations) and Pikmin (some 2-3m units, which were great numbers for GC games). They also relaunched the old IP Metroid to great sales figures.

Yes, they still depend heavily on Mario, but to some extent I think stating that as a big weakness is somewhat akin to wondering what the heck Disney would be without Mickey Mouse and Donald Duck.

Nintendogs and Brain Age - Both huge sellers. But they were also one-hit wonders with little lasting competitive advantage as IP. They are not enduring franchises with moats.

Animal Crossing - Yes, definitely a successful new franchise. I forgot about that one!

Pikmin - Great game, but those numbers are not great for a franchise of 5 titles. Only 2 Pikmin games managed to hit even 1M units.

I didn't state that depending on Mario was a huge weakness. I was just pointing out (or maybe agreeing with another poster) that Nintendo does heavily rely on its own stable of long-standing IP, since it gets relatively weak support from 3rd-party developers.

I have a lot of respect for Nintendo. This is a company that has been making games for over 120 years! They have created amazing franchises that go all the way back to arcade machines in the 1970s. They have been written off as dead or irrelevant several times, and have always managed to innovate their way back into position.

At the same time, I think it's really hard for anyone to handicap the odds of success going forward. The video-game business is going through a tremendous amount of disruption right now. Increasingly, Nintendo's competitors in the casual and family gaming space are not Microsoft and Sony, but Apple and Google. It's very difficult to compete with $1-$2 games on open platforms.

I've never looked at Nintendo as a stock, so I don't know to what extent the investment thesis depends on assumptions about its future. Maybe it's a net-net, in which case predicting the future is not necessary. But if you need to assume anything about where Nintendo will be in 3-5 years, then for me it would be in the "too hard" pile.

Time for Father's Day brunch!

alwaysinvert

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Re: NTDOY - Nintendo
« Reply #24 on: June 17, 2012, 12:58:08 PM »
I'm not sure why you state Nintendogs and Brain Age as one-hit wonders. They have both had high-selling sequels. Yes, they sure aren't as reliable as Mario or a Blizzard franchise at the moment but I don't think we can be so sure that they aren't enduring franchises.

As for Pikmin, I only know of two titles that were both released for Gamecube, and thus never could rack up the huge sales of Wii games. For Gamecube games they did very well, however. Let's wait and see how Pikmin 3 does for the Wii U.

I agree with you that handicapping what happens next is hard. Valuing Nintendo merely on FCF history is hazardous, but I still think there are huge values in their numerous franchises, even if Nintendo could possibly squander a lot of value by getting on the wrong side of the next technology paradigm. To me, however, it seems that management is taking a somewhat pragmatic view even if they won't do what everybody is screaming for and develop for Apple.

Nintendo is not quite a netnet, but damn close for a company with their quality.

And I'm not so sure $1 games on an Ipad(Iphone is really a substitute for New Super Mario Bros. I see very few free or low-cost games that you could spend hour upon hour playing, while they certainly serve their purpose well in short bursts.
« Last Edit: June 17, 2012, 01:03:57 PM by alwaysinvert »

alwaysinvert

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Re: NTDOY - Nintendo
« Reply #25 on: June 17, 2012, 01:06:48 PM »
Nintendo could be quite interesting as a play on a weaker yen, too. They get +80% of their business from abroad so the strong yen is hurting their business severely atm.

I don't own any stock yet but I am close to pulling the trigger.

whistlerbumps

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Re: NTDOY - Nintendo
« Reply #26 on: July 17, 2012, 07:17:23 AM »
I have owned Nintendo in the past (pre Wii launch) and think it is a great company.  I don't own any now though and would like to add one cautionary note.  I think it is a very flawed assumption to give full credit to the cash on the balance sheet, especially when thinking about downside protection.  This cash will not be returned to shareholders in any material quantity (see divvy cut even with wildly overcapitalized balance sheet) and will certainly be used to fund operating losses if the Wii U is a flop.  I think a material haircut (30%, 50%?) is warranted to account for the trapped nature of the cash.  Thus, I think that NTDOY at current prices is a bet that either the Wii U is successful (certainly possible) or that the 3DS will sell more software and generate sufficient cash flow to offset 3DS hardware and Wii U losses.  At this price, I am not yet comfortable with that best. 

alwaysinvert

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Re: NTDOY - Nintendo
« Reply #27 on: November 01, 2012, 04:30:49 PM »
We are way, way behind on VOD here in Europe compared to you guys on the other side of the pond, so I'm not particularly atune to the way you use it, but doesn't the TVii function look very neat?

http://www.youtube.com/watch?v=12vyUOdPXbE&t=22m40s
« Last Edit: November 01, 2012, 04:35:58 PM by alwaysinvert »

alwaysinvert

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Re: NTDOY - Nintendo
« Reply #28 on: December 18, 2012, 04:42:52 PM »
So, seems like the interest in this thread is moderate at best... But the share price has come down quite a bit again. The Wii U sales have been good initially (something that shouldn't be considered all that important - game consoles have become successes both with bad releases and with good ones, however Christmas sales may give som good indications). They are dominating game sales in the total market since the 3DS has continued to pick up speed both on the hardware and software side.

Satoru Iwata on the Wii U outlook:

Quote
I do not yet have all the necessary information to be able to say exactly when Wii U hardware will start to be sold at a profit. If you just look at this fiscal year, I do not expect Wii U to make a big contribution to our profits since the software sales will be rather limited due to a rather limited installed base of the hardware and, even as a whole, we cannot be optimistic about their combined profit contribution either when we take into consideration the fact that we need to invest a lot into our advertising activities at first. However, in the next fiscal year, we will have a larger installed base. We will have a richer array of software and manufacturing costs will also decrease. Therefore I believe that, as opposed to simply asking when we will be able to sell Wii U at a profit, the focus should be on constructing a healthy profit structure for the business as a whole by launching a sufficient amount of quality software at fast enough a pace for our home console, on which we can look to achieve a higher tie ratio* than on handheld systems, and selling as many units of software as possible. I believe this is a goal we can achieve in the next fiscal year. While I cannot say exactly when the Wii U hardware will become profitable, I am confident that in the next fiscal year we can improve our Wii U business to a level where the platform business as a whole (when we include both the hardware and the software) makes solid contributions to our profits

As per the financials of Sept. 30th the stock trades at b/p 1 and ncav/p 0.8.

Outlook is foggy as hell but I think the cash sucking black hole scenario is out of question for this generation now. I am however not yet sure if that makes the stock underpriced enough.

rjstc

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Re: NTDOY - Nintendo
« Reply #29 on: December 18, 2012, 05:16:53 PM »
Rupal Bhansali.  I recently watched a Steve Forbes interview of her. She is with the Ariel Fund. I was very impressed. She had some good comments about Nintendo. I believe it was about 11/19/12.
     It's not far off 52 week lows right now. I personally have bought some.