Let's start this with a disclaimer - we're not high-rolling investors or employed as financial analysts. So when we talk about investors and share prices, we're looking in with our own perspective and trying to make sense of how the market's working and why it's behaving in certain ways. We're curious and it matters because it's important to Nintendo as a business, with happy investors leading to increased company value and security. With those things in place the big N can make more games and fun things for us all to enjoy.
Of course, the company announced a major change on 14th September - just over two weeks ago - by naming Tatsumi Kimishima as the new President of Nintendo following the interim leadership of Shigeru Miyamoto and Genyo Takeda. A company veteran with extensive experience outside of the company and within, including a number of years as President of The Pokémon Company and then Nintendo of America, Kimisihima-san is experienced at the highest level of corporate management, understands the games industry and knows the Western markets well, which is important when trying to secure global success.
We outlined Kimishima-san's credentials following his announcement and argued that he represents a safe pair of hands, and he has also arrived with a change of company structure. Satoru Iwata's leadership style was very much that of the lead policy maker and visionary, driving forward key decisions across the breadth of the company. Yet under the new President both Shigeru Miyamoto and Genyo Takeda have moved up the ladder to become 'Fellows' in their respective fields, with the role to provide "advice and guidance regarding organizational operations in a specialized area". This seems like a notable move in terms of these figures working closely with Kimishima-san in their particular areas, with the new Nintendo President's background being in corporate management as opposed to being a video game industry innovator. Kimishima-san even spelled it out clearly, saying that "we thought it's better that Takeda and Miyamoto manage hardware and software, and I control administration".
Beyond that Kimishima-san has stated that he'll be implementing Satoru Iwata's plans for smart devices and IP usage, while key teams and departments have been merged together into new groups, with game-related development in one camp and business development in another. A positive way to look at that is to consider that as a result Nintendo could be leaner and more efficient in these areas, bringing its talent closer together to produce the finest results.
Statements from Kimishima-san on continuing Iwata-san's vision, the company restructuring and 'promotion' of Shigeru Miyamoto and Genyo Takeda, the streamlining of teams - all of this has been designed to reassure nervous onlookers and, more importantly, to give Nintendo a new stability and focus moving forward under new leadership. Creative figureheads are in place to ensure Nintendo retains its innovative spark, teams are being modernised and there's a leader that knows how to manage a corporation and has direct experience not only of Japan's market but also that of North America. What's not to like?
Evidently, all of this is to no avail. We've been keeping an eye on Nintendo's stock value since Kimishima-san was appointed, just for fun times and giggles, and there's been a double digit percentage decline since 14th September. To be clear Nintendo's value is still much higher than it was prior to the DeNA smart-device deal what prompted a surge in value, but nevertheless there's been a notable increase.
Below is the evidence, which reflects the continual recent decline while also showing the peaks and troughs that have come over the Summer.
So why is this? In one case - and as quoted at the time by Bloomberg - we have Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co, who clarified one reason why share prices immediately started to drop upon the announcement.
It's a very orthodox choice, which sends a message that the company is choosing to stay the course. Investors expecting growth would have preferred to see some bigger changes. Someone with a direct experience in designing games would have been better.
This does seem, to an extent, the consequence of the vagaries of the investor market. We live in a world where corporations buy companies for billions of dollars before a product has been fully launched, in which potential alone is enough. Some of those very corporations are valued in the billions of dollars before they even generate a profit. Cold, hard cash matters in the real world, yes, but it's also spent and invested off the back of what might be in the future. Tatsumi Kimishima, it seems, doesn't have the spark and dash of excitement that some trading in shares desire.
We've seen these erratic trends in the markets over the past year with Nintendo. Financially relatively little has changed in the last 12 months, with the company returning some solid profit in consecutive returns - after a few years of losses. In fact, revenue and sales have been getting worse, yet shares spiked to their highest point in around four years when the DeNA partnership was announced earlier in the year. We don't even know what the first game from the relationship is yet, but the potential of Nintendo franchises on iOS and Android was enough to send shares jumping. The 'NX' was also announced around the same time, but the talk of investors focused on smart device profits.
The latest drop, as of the close of markets on 29th September, brought Nintendo's share value to its lowest point since early April, when the steady increases were still inconsistent. Of course there are external factors beyond perceptions around Nintendo with Kimishima-san at the helm - beyond mere market forces there are normal reactions to Nintendo's latest business moves, which may include the delay beyond Christmas of Star Fox Zero. Perhaps of bigger note is that we're heading into the final quarter of 2015 with no idea, as yet, of the smart device game that's coming before the year is done. Perhaps some jitters are present.
In the end, what'll matter for Nintendo's President and the company will be the long term picture. It's nevertheless intriguing, and slightly puzzling, that a new permanent successor in the top role and a restructuring process to give figureheads such as Shigeru Miyamoto even more vital influence was greeting with an initial and then steady lack of enthusiasm from investors. Stability and a steady hand clearly don't play well in the thrill-seeking investor market.