Barron's Predicts Strong Nintendo Growth to Resume This Year

[Andy Chalk]

Barron's Predicts Strong Nintendo Growth to Resume This Year

Despite the recent slide in Nintendo [http://www.nintendo.com] share prices, Barron's says investors are ignoring the company's strengths and predicts that "strong growth" should resume later this year.

Nintendo's share price has been hit hard by slowing hardware sales and a reduced profit forecast, according to a unhealthy condition [http://www.reuters.com/article/companyNews/idUKTRE53I2BN20090419] since it hit the Japanese market."

But while some observers are Barron's [http://www.escapistmagazine.com/news/view/91056-Japanese-Analysts-Speculate-on-Nintendo-Crash] said other analysts have predicted that the company actually beat profit forecasts, earning up to $5.6 billion in operating profit, and are saying that earnings will "rise sharply" in the 2010 fiscal year. The report also noted that investors are "ignoring Nintendo's strong balance sheet, its capacity for boosting its dividend and shares that are priced reasonably relative to the company's projected growth." As a result, the company's "strong growth" should resume this year.

In other words: Keep your fork handy, but don't stick it into Nintendo just yet.

via: Gamasutra [http://www.gamasutra.com/php-bin/news_index.php?story=23281]


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[KDR_11k]

Reads to me more like the "in other words" part should read "invest while the share is low, reap profits once it goes up again".

I'm pretty sure the slowdown is because of a lack of new games (especially killer apps which the Wii has been getting quite regularly before the big drought) so once new games come out it should be revitalized.

 

[bodyklok]

You know sometimes I don't want nintendo to fail, but then I remember all the money they have and I stop worrying about them.

 

[Sewblon]

They will be back in action once I convince them to make a fully 3D Kirby game and Super Mario Time Traveler.

 

[Pumpkin_Eater]

The PS3 outsold the Wii because everyone already has a Wii. I don't see Nintendo failing any time this generation because the volume of Wiis sold is so enormous that even one successful game amidst a string of failures would be enough to keep them afloat. Two would be money in the bank.

 

[KDR_11k]

The PS3 outsold the Wii because everyone already has a Wii.

People always declare "everybody has an X" when something popular gets lower sales. No, they don't, there's still almost 100 million sales to go to capture the whole PS2 audience (well, assuming the 140 million figure doesn't include replacements for failures which seem to be quite numerous with the PS2) and then some with the new gamers. Additionally there are ~300 million people in the USA, ~500 million in the EU, ~100 million in Japan and some more in additional territories, even if we assume that 4 people form one household and thus only buy one Wii that's still over 200 million potential sales.

 

[Pumpkin_Eater]

The PS3 outsold the Wii because everyone already has a Wii.

People always declare "everybody has an X" when something popular gets lower sales. No, they don't, there's still almost 100 million sales to go to capture the whole PS2 audience (well, assuming the 140 million figure doesn't include replacements for failures which seem to be quite numerous with the PS2) and then some with the new gamers. Additionally there are ~300 million people in the USA, ~500 million in the EU, ~100 million in Japan and some more in additional territories, even if we assume that 4 people form one household and thus only buy one Wii that's still over 200 million potential sales.

It outsold the Wii in Japan so the US and Europe markets aren't relevant to what I said. If I had meant everyone in the literal sense then the current sales would havve to be close to zero (even a newer system has some units burn out) for it to make sense; my point was that demand is declining because they have already sold so many. The PS3 on the other hand has had luckluster sales from the beginning so the market is still wide open, albeit not enthusiastic.