Author Topic: NTDOY - Nintendo  (Read 87873 times)

Palantir

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Re: NTDOY - Nintendo
« Reply #30 on: December 18, 2012, 07:19:34 PM »
I think Nintendo has some great characteristics as well as risks....anyone have any insights/links to articles about their new CEO. I think that is absolutely crucial for a firm like this.


In some way, Nintendo is like Apple - integrate hardware with software.

Interested in hearing from the bulls on what indicators they would look for.
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alwaysinvert

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Re: NTDOY - Nintendo
« Reply #31 on: December 18, 2012, 08:16:03 PM »
I think Nintendo has some great characteristics as well as risks....anyone have any insights/links to articles about their new CEO. I think that is absolutely crucial for a firm like this.


In some way, Nintendo is like Apple - integrate hardware with software.

Interested in hearing from the bulls on what indicators they would look for.
New? He's been there for 10 years, you know. There are some details to be read in the book Nintendo Magic.

First outside CEO ever (first one not from the Yamauchi clan, even), trained computer programmer and game developer who headed HAL Labratory (now a second-party developer for Nintendo; the company behind the Kirby franchise and Super Smash Bros. among other games) before being handpicked by Yamauchi to head Nintendo. For me he gets full marks and seems to not only care about Nintendo as a company but also about the shareholders.

The problems I have with Nintendo are more due to business characteristics. There is a perfectly valid reason that they have so much cash on the balance sheet. And it's not that they are Japanese. When it comes to corporate governance, Nintendo is as Western as a Japanese company can be - they wouldn't hurt the returns for shareholders just to be able to not lay off people when times get rougher. The reasons are, explicitly stated by Iwata, that a flop could get them $5b or so in the hole quite easily. So they should maybe not get 100% credit for the cash in a valuation. On the other hand, it's extremely hard to deny the value of their franchises - but even harder to quantify.

My sole worry when it comes to personel is that Shigeru Miyamoto is getting old and has most of his ideas behind him - and those are the ideas that are Nintendo of today. Mario, Zelda, Donkey Kong, Star Fox, Pikmin etc. The only high-profile long-lasting Nintendo franchises that weren't his ideas are Metroid and Pokemon, and even there he has had some input, at least in later installations. Even if he has another 10 years of work in him, the creative flame is likely extinguishing, like for most people that are 60+ . So the hope in that regard is that his continuing mentoring will foster some good talents. The option on a new big hit of some kind is always attractive of course and may be the deciding factor on the value of the company. A new Pokemon type hit would make current shareholders filthy rich.

Green King

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Re: NTDOY - Nintendo
« Reply #32 on: December 18, 2012, 08:19:49 PM »
you have done some great work. Seems all one needs is to wait.
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Palantir

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Re: NTDOY - Nintendo
« Reply #33 on: December 18, 2012, 08:50:24 PM »
 :-[ Oops....I confused NTDOY with Sony then regarding "new CEO".

I agree with your point on Mr Miyamoto aging, but a lot of these franchises are in place already, for example the core story of Zelda has been created and reinvented many times throughout the game's history. (My fave was OoT). I'm not that worried about the continuation of these franchises. The biggest concern to me apart from threats from smartphones and tablets is the fact that one flop would likely be enough to vaporize the company given the firm's size.

With Xbox, MSFT is turning this into a living room powerhouse, something that will integrate with other Microsoft devices, and I don't think Nintendo can create the same network effects.

I like Nintendo, and that's the only system I owned as a kid, but I don't play videogames anymore, and I don't know if the current generation of kids have the same attachment to these games that my gen did.


Do you think a strategic acquirer like say Disney is a possibility? NTDOY's situation seems to me to be a hybrid of Apple prior to Jobs and Disney after Walt.
« Last Edit: December 18, 2012, 09:01:00 PM by Palantir »
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Green King

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Re: NTDOY - Nintendo
« Reply #34 on: December 18, 2012, 09:06:57 PM »
Rupal Bhansali Forbes inteview

http://www.youtube.com/watch?v=afzffbDP9SY

I think there is a free call on new ways to monetize the franchise.
Also I don't think there is significant synergies with full interrogation. (not sure) What will be the benefit for me ? or the game developers?   
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Palantir

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Re: NTDOY - Nintendo
« Reply #35 on: December 19, 2012, 09:10:56 AM »
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hyten1

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Re: NTDOY - Nintendo
« Reply #36 on: December 19, 2012, 11:34:23 AM »
anyone ever did any analysis on what if NTDOY becomse purely a game developer/utilize its franchiese in mario, zelda etc

instead of building console etc.

the star wars franchise sold for 4bil, how much is nintendo's many characters/franchise worth?

their enterprise value is currently 2.5bil or so, not if wii u is a flop that can easily eat into some of their cash positions.

i haven't follow this long anyone ever ask nintendo management and what were their response?

Rabbitisrich

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Re: NTDOY - Nintendo
« Reply #37 on: December 19, 2012, 11:58:14 AM »

alwaysinvert

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Re: NTDOY - Nintendo
« Reply #38 on: December 19, 2012, 12:32:30 PM »
anyone ever did any analysis on what if NTDOY becomse purely a game developer/utilize its franchiese in mario, zelda etc

instead of building console etc.

the star wars franchise sold for 4bil, how much is nintendo's many characters/franchise worth?

their enterprise value is currently 2.5bil or so, not if wii u is a flop that can easily eat into some of their cash positions.

i haven't follow this long anyone ever ask nintendo management and what were their response?
Short answer on the pure software developer question is that it's not going to happen. At least not until it would be painfully obvious that the present road is going nowhere. For all the specific reasons I again direct you to the book Nintendo Magic. But in short: the company views itself not as a gaming or tech company but as an amusement company. As such its main objective is not to develop good games but make fun, novel products for the consumers.

To be able to do that they want to have complete control of the user experience (not unlike Apple in that regard) and not do that inhibited by some system set up by another company. That's also the reason why pretty much all Nintendo hardware is 'gimmicky'. They pride themselves in offering new and unique experiences and ways of playing. The internal analysis is that they strayed from that objective in the N64 and GC generations, which were comparably high-tech creations, and that's why they fell behind. So you are not going to see them make something traditional very soon or maybe even ever.

As for the franchises, I am pretty sure they are underutilized despite  the company chugging out sequels at a decent clip. Why couldn't there be one or several Nintendo theme parks? I know for sure that my 10 year old self would rather visit one of those than Disney World. Cable channels or big-screen movies doesn't seem that far out of reach either. But Nintendo wants to have quality control and they obviously don't have the inhouse competence to do all these things, so I don't know when or if it actually could happen. They also always stress not making what the other guy does and building theme parks and licensing games for movies certainly falls under that label. Maybe if they could find a partnership with a very good director so it won't turn out like some awful attempts (Super Mario Bros with Dennis Hopper and the animated Final Fantasy movie for example).

Some of Nintendo's value simply elude quantification. You know there's great value there, but the characteristics of both the business itself and the competition makes it very hard to grasp.

I highy recommend the Q&A:s at Nintendo's IR site, by the way. Lots can be gained when it comes to management culture and business strategy from them. And reading the extremely Japanese politeness in English adds some flavour to it :)

Palantir

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Re: NTDOY - Nintendo
« Reply #39 on: December 19, 2012, 12:50:51 PM »
It really does sound more and more like Apple, especially your comment about not making technologically advanced products, but focusing on the user experience.
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