News Article

Nintendo Share Price Drops In Reaction to Investor Briefing

Posted by Thomas Whitehead

Let's see if it pops back up again...

While diligently following the progress of Satoru Iwata's Investor Briefing, we were keeping track of a Wall Street Journal live blog that observed that, as the presentation progressed, the Tokyo exchange wasn't exactly giddy at what was being said, with the share price falling. It seems like that's played out, with Nintendo Co. shares closing the day with a drop in Tokyo Trading.

As reported by Bloomberg, the close of the Tokyo exchange brought a drop of 4.3% (to 12,325 yen) following Satoru Iwata's various announcements yesterday. These included announcements of increased GamePad focus, a dedicated smart device service development team, and a new "Quality of Life" product to be announced this year, along with other strategic plans. The briefing did ignore various calls for full games on smart devices, for example, and Nintendo has chosen to stand by its core hardware and software model along with evolutions in its business practices.

Here's an example of investor feedback as provided by Bloomberg, in this case Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co.

I don’t see any path to an earnings recovery in the short term. The business plan was as I expected. I didn’t foresee any drastic changes.

The chart below shows that the drop isn't a particularly sharp decline — beyond that of earlier this month — but more reflective of Iwata-san's announcements not inspiring investors.

Nintendo's share price, in general, is hovering at levels along the lines of what they were for much of 2013, though the company will naturally wish to begin a climb to past glories in 2014 and beyond.

So investors didn't embrace Nintendo's strategies with glee; if that changes in the next day or so we'll post an update.


From the web

User Comments (51)



Ronoh said:

Stocks go up and down every week. If you're not going to report on both the ups and downs, then you should probably not bother reporting on it at all. Drops like this are erased within a day or two all the time. In other words: this is normal in both directions.



spidey1010 said:

Whatever, Wall Street.

I love the idea of Nintendo coming out with a totally new product. Even if it's not something I'll buy, trying new things is Nintendo's forte. It's the only way they'll strike gold again like they did with the Wii.



ACK said:

Clever. Grind those stock prices down and buy back shares, simultaneously.



Ryno said:

Not surprised, investors want to see Nintendo games on smart phones asap.



cookiex said:

Most of Iwata's announcements didn't go into quick solutions the stockholders want (as they always do), so no surprise it dropped.

It's bound to go back up anyway.



Gerbwmu said:

Stocks go down.......Nintendo buys some of their 10 million shares at a cheaper price......stocks return to normal.......Nintendo waits till the next time stocks drop on any news.....buys more of the 10 million shares......



GuSolarFlare said:

all part of the plan. making doubtful news that make their future look bad so the shares lose price and then Nintendo takes full control of itself again. no more annoying shareholders with dumb ideas just to please the market, the rebirth of the pure gaming.
or so I want to imply. just to start a new chaotic discussion of conspiracy and madness



TingLz said:

That's ok, it'll be up tomorrow and no one (from Wall Street) will report it. Nothing to see here folks



Savino said:

@Guybrush20X6 Not genius, not new!

And its not honest forcing your papers down so you can rebuy it... There is even laws against it, if I am not mistaken, in order to protect the investors!

In the other hand, a company like this cannot live in the market for long (not that it is a bad thing)... Would you buy papers of a company who have a history of downs and re-acquisition?! They clearly are taking your money to keep more control over the company!



ultraraichu said:

Buy low, sell high, that's the stock's market way of life. They'll just get new investors that can profit off the trade at the current value or future low value but I'm not going to be that dark.



Burning_Spear said:

Not surprised. IMO, Iwata said nothing that suggested that he has a way to fix Nintendo's problems.



NintyMan said:

That's finicky Wall Street for you. They'll go up again and then be down again later; that's just how the cycle of business goes.



Mahe said:

Increased Gamepad focus was terrible news. Iwata was spouting sheer idiocy.



Hyperstar96 said:

For years, analysts beg Nintendo to do something with smart devices, and the stock price goes down as a result of Nintendo refusing to do so.
Iwata announces major future connections with smart devices.
Analysts don't like the connection and share prices go down even more.

... Well, I'm done trying to make sense of humanity. I give up. People are too stupid for their own good.



MrWalkieTalkie said:

@Mahe how is it a bad thing? It was the lack of focus on the GamePad that made many people think it's just a controller for the Wii. And it's lack of unique use in games has left many questioning what's the point of it if it doesn't change up the game that much? We need more game changing uses and focus on GamePad if Wii U is to ever become a success.



MJKOP said:

'I don't see any path to an earnings recovery in the short term' They want a fix and they want it now, short term profits is what they're interested in. A necessary evil maybe but those guys, eugh, they annoy me. Nintendo will get it right



HyperSonicEXE said:

It wasn't just the short term strategy, I mean, those suck when talking about "making do with what you've got" anyway. That's expected.
But the mid-term and long-term strategies, based on past business, just aren't viable. QOL and Wii U/DS are just extensions of current product lines. NFC and the tablet functions of the GamePad are in fact fads that Iwata contradicted himself in his own presentation and said Nintendo doesn't try to follow those. Extending IP's to third parties is extremely risky business, although sometimes, it brings tremendous things such as F-Zero GX, Kirby's Epic Yarn, the LoZ Oracle series, etc. But for those few good examples, there are many damaging examples (chief among them being Other M, in my book). And they kept avoiding mobile on the grounds that "Well it's not our strength as a hardware/software company."

Well, the hardware part of that strength is failing on multiple levels. The Wii bucked the negative revenue trend, and then after ignoring consumer desires, the Wii U is falling right back into that negative trend where it left off. On top of that, the handheld console is their only solid leg - consoles are no longer convenient or State of the Art, and easily replaced by cost-savvy smartphones or PC's.

I applaud the QOL approach, and I'm excited to see them leaping ahead two hardware forms,and Zelda Musou looks promising, but the rest of that presentation was business-school level status quo baloney.



LoveSugoi said:

Guess this is actually positive news since it'll be cheaper for Nintendo to buy up more of their shares.



gatorboi352 said:

What amazes me the most is that throughout all the hoopla yesterday, not a single mention (or question) about the use of multiple GamePads.

Their main input device on their latest console, and you can only use 1. Embarrassing.

Oddly, Nintendo's official Wii U site has said the console supports up to 2 GamePads since last November.



Capt_N said:

Joan, & her Turnip prices. Ahh, those bells... Buy low, sell 'em high. Joan, & Nook,.. quite a pair of financiers, those two.

Seriously, Wall Street wants what it realistically can't have all the time from any given co., & that's fat wallets!



vattodev said:

Great! Let them go down! Nintendo announced they will be buying a ton of shares anyway. The lower the better.



64supermario said:

Watch it go back up at the end of the day. This news is always relatively pointless, since its so varied. The only time I remember these being significant was when Xbox revealed the One and Sony's stock sky rocketed.



xevious said:

Well, the only thing that would please investors would be shifting to mobile platforms. I'm so glad Nintendo has the common sense not to do that. From a gamer's perspective, I think Nintendo's strategy sounds pretty solid. Increased focus on Gamepad + classic Nintendo series to other developers is EXACTLY what needs to be done with the platform. Also, a new platform aimed at the Wii Fit non-gamer could work out. Good job, Iwata!



whodatninja said:

I really liked what was being said. I dont know which presentation those Japanese investors were watching.



Agent721 said:

It'll keep dropping. When it falls below $10, its a buy. Take it from a long time investor in the gaming sector, who predicted this exact thing just a few days ago. Nintendo just doesn't get it. Yes, I own a Wii U, along with every other Nintendo console basically ever made. The company will be just fine in the long run, but more pain is ahead, stock wise. However, that will present a very compelling buying opp, as Nintendo is simply poorly managed. The IPs, however, are truly worth a ton whe managed correctly.



8bitforever said:

@xevious what about fixing their crappy account system? Nintendo didn't win anything with these announcements. They only showed how disconnected to the gaming world they have become. The WiiU will be lucky to survive 2014. Once PS4 and Xbox One start getting games that cannot possibly be done on the WiiU ( which is already starting to happen) it's game over for any hope of third party support. This only convinces me more to stop buying anything Nintendo related and start spending on consoles that I know have a future.



Matts14 said:

@Ronoh but this ones important because it shows an initial share holder reaction to the briefing. They also reported when the stock went up after china "legalized" video games.



grimbldoo said:

If Nintendo is planning on buying some shares back, this is actually ideal for them.



hotlfusion said:

Nintendo can buy back as much stock as they want at these prices but it changes nothing.
Wii U is still a potential disaster that needs to be dealt with, whoever owns the shares.
Whether their stock prices rise or fall they still have a tough road ahead and it is the decisions they make that are important, The stock market have little faith in them getting out of their current situation hence the fall.
So far nothing Iwata has said gives me the confidence to invest in them again either.



Gamer83 said:

"The briefing did ignore various calls for full games on smart devices"

Good, and it should remain that way. These morons who think Nintendo putting games on smart devices is in anyway a good thing have utterly no clue. Smart devices suck for games, and I don't usually say this, but that's not an opinion, that is an absolute fact.



Nomad said:

Ok Nintendo, enough with the shareholders and the investors. It s time to give us gamers some attention. Where's our Nintendo direct? Where are games and release dates. Where's the plan to save Wii U in 2014. Throw us a bone Nintendo or have you forgotten us gamers. Yes I'm aware no one at Nintendo will read this, just venting my frustration with Nintendo's lack of communication at the moment with us Wii U owners.



DualWielding said:

I'll wait about two years for shares to drop even further, then buy... I think Nintendo would make a strong comeback next gen... If I knew how to buy shares I'll buy Nintendo shares once they hit bottom



xevious said:


Well, if focusing on Gamepad functionality, giving classic Nintendo series for other developers to work on + showing new games at E3 is not what you wanted them to do with the Wii U, then what? Some of the main problems with the Wii U is that there aren't enough games and the Gamepad is not used up to it's potential. These are problems they'll be addressing, according to Iwata.

This is no longer about making the Wii U a success, but about damage control and making the best of it with what can realistically be done. It's not like they can pull a magic trick out of their sleeve, that would make the third parties love the system all of a sudden etc. The third party support is gone, and I don't think anything can bring that back now and it's not that big of an issue as long as we'll be getting good first and second party games, for me at least. That's what I buy my Nintendo system for, not some lazy ports of PS3/x360 games...



sevex said:

I'm no investor, but I've always wanted to own some shares in Nintendo. Maybe this is a good time to do it since they'll definitely go back up from here.



thesilverbrick said:

@Mahe You always insist on trashing the Gamepad, but without it, the Wii U is an underpowered, decidedly last gen console with nothing innovative in its control scheme. They need to focus on the Gamepad to differentiate the Wii U from its competition. This was great news; your rantings are the idiocy...



IceClimbers said:

@8bitforever It was game over for third party support before that. 3rd parties are a lost cause. I don't know why all you and these other people keep saying that Nintendo needs to go after 3rd parties, when it is POINTLESS. Wii U's successor won't have 3rd party support either, regardless of hardware specs, sales, install base, etc. 3rd parties are useless and will die off on their own anyways once Xbox and PlayStation are dissolved. Nintendo tried to support and give 3rd parties a chance before - that resulted in the chaos that was the 3DS launch. Nintendo needs to go after indies, not 3rd parties.



NintendoROCKET said:

Now these so called "investors" aren't even giving this legend I mean company a flipping chance!!! D:<

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