Earlier in the week we reported upon a dramatic drop in Nintendo's share value, which was prompted by the company's statement that Pokémon GO would only have a 'limited' impact on its finances. Nintendo only has a share of The Pokémon Company and Niantic, separately, and clarified that the extraordinary success for the app wouldn't bring substantial profits to its own coffers.
The sell-off of shares and 'short selling' this week were record breaking at points, with Nintendo losing some of the huge gains it had made off the back of excitement around GO. From 28,220 Yen on 22nd July, Nintendo's revelation caused a drop over multiple days to a little over 21,000 Yen per share. However, as you can see below the decline began to slow and then, in today's trading in Tokyo (29th July) the share value closed up 2%, on 21,505 Yen.
Nintendo's share value (as that graph shows) is still well up on pre-GO levels, though this week's drop of 24% is "the worst weekly performance since September 1989", according to Bloomberg. Nevertheless, the worst of the decline seems to have passed, and SMBC Nikko Securities Inc.'s Eiji Maeda has improved his company's outlook for Nintendo. He estimates that even a 7% share of GO revenues, which is his estimate of what Nintendo will receive, could add between $191-$287 million to the company's bottom line this financial year. The analyst also strikes a cautious tone and thinks the focus of the markets will shift to key future Nintendo products, like NX and its next smart device apps.
While positives appear to have played out for a while now that the Pokémon GO smartphone game boom has been priced in, we believe negatives have also been aired. We expect the market's focus to shift from Pokémon GO to the Animal Crossing and Fire Emblem smartphone games that are due for release in autumn 2016 and the next-generation NX console that is due to go on sale in March 2017.
While expectations for Nintendo are high given its track record in creating global hits, we think it is premature to price in excessive expectations while details of the prospective products have not been disclosed.
All told, the week has ended with some positives for Nintendo's share price; the decline has levelled out, short-selling is dropping off and some calm has been restored. The financial markets, it seems, remain as volatile as ever, so Nintendo will likely be pleased to see the situation under control.
[source bloomberg.com]
Comments 44
1. The NX better be mind-blowing.
2. It has to launch with Zelda: BOTW
"I was soaring even higher, but I flew to high"
hahahah meteoric ascension is always followed by a huge fall, but now that the price is stabilized Nintendo should be fine.
Gen 1 ftw!
It looks like a level from ExciteBike lol
It tells a lot about investors' lack of specialized knowledge that they believed Nintendo'd be the main profiteer of Pokemon Go's success.
you coulda made a killing with nintendo in the past couple of weeks. buy it low; then take profit and short it at it's peak.
Kinda obvious, this is how market works, especially in such sharp rises.
When companies have rises as this in such short time, people that were heavily invested and lost money while stocks were falling will sell, or even people that bought cheap will sell now, those people are there for the short term, small gains. after that the stock prize should stabilize
I just hope we start learning more about Nintendo's future soon. Cause it's way too cloudy still and this holiday isn't exactly full of excitement outside of Pokemon Sun/Moon.
@XCWarrior You forgot the Mini NES system launching in November, which sold out in UK and USA on Amazon if I remember correctly.
There is indeed a Market for retro things :3
"Hey, guys, you know how you've all been buying up our stock like mad? You might want to invest that money into a company that actually has something to do with Pokemon Go."
And everything went back to normal
@CidMaik There's a market, and maybe worldwide they sell a million of those suckers, but that isn't going to replace what their two systems should be selling in a holiday. WiiU might sell 2 million units this entire year, and 3DS probably at most double that just because its so old.
FY2016 won't be great for Nintendo. Just hoping FY2017 will be the start of the next great era.
I don't get why everyone and their mother are focussing on negativity regarding this. Pokemon Go made Nintendo's stock rise enormously and it was unprecedented and record-braking.
Then the stock falls considerably, but not as much as it had previously gained, and all people talk about are a record-braking, unprecentended loss.
But the fact remains that Nintendo's stock is still way higher than before Pokemon Go's release. So really, they should be focussing on the mere fact that Nintendo's still made a very healthy profit.
Pokemon Go increased Nintendo's stock to almost $12 billion and then it fell down by $6.7 billion. Which means Nintendo's stock gained $5.3 billion by doing nothing, since Nintendo hasn't developed the app.
So who cares about the biggest market value loss since 1989? It wouldn't have been possible without the biggest rise in market value in the first place. Those two things belong together, if you separate them, you take them out of context.
That's why I can't take the stock market seriously. First they go crazy about something, then they realise that in reality, that something had nothing to do with the company they just bought stocks from, they panic and sell those stocks again quickly.
The Stock market isn't about facts, it's about feelings. So it's basically like American (or even world) politics right now. The Stock Market is the Donald Drumpf of Finance.
Reminds me of The Commonwealth of Virginia.
Boring.
No pressure then NX Reveal and Animal Crossing+Fire Emblem App/Games....
This the real reason behind the latest "NX leak/story".....imo.
@XCWarrior I hope so as well, though I am rather excited for Paper Mario: Color Splash and Mario Party: Star Rush.
@XCWarrior "WiiU might sell 2 million units this entire year,"
Why would you think such a high number? Nintendo itself has said on several occasions it only expects to sell 800,000 (800 thousand) between April 1, 2016 and March 31 2017 (1 financial year). It just repeated that number 2 days ago on Wed.
https://www.nintendolife.com/news/2016/07/nintendos_q1_financials_bring_losses_and_modest_sales_but_company_sticks_to_profit_projections
Wii U
Hardware Sales (Q1) — 220,000 units
Hardware Sales (life to date) — 13.02 million units
Hardware Sales Projection (2016 to 2017) — 800,000 units
What's crazy is, if you simply multiple Q1 by 4 you get over 800k, and the holiday (Q3) should be a better selling time than Q1. And with Nitnedo once saying Zelda Wild would release in March 2017 you would expect even more Wii U sales. And you would expect a price drop for the holdiay would sell even more. But Ntineod keeps saying 800,000.
My thought is they only had 800,000 left when they said that and they aren't making any more, that's why it can't be higher than 800,000. They could reach 2 mil like you said if they wanted to, just cut the price and bundle newer games than MK8, but they are only predicting 800k, so they must know no price cuts or bundles, and maybe not even Zelda in March.
I think this is basically what Nintendo wanted. They were very keen to point out Pokémon Go was not their thing, probably because they wanted the artificial inflation to stabilise sooner rather than later. It was always going to fall back down soon, plus they probably don't want to sour their relationship with the actual devs by hogging the glory and reaping all the rewards. And this should take the pressure of their actual apps when they come out.
@rjejr Dude, CHILL.
I was trying to be nice and sound optimistic.
I thought about saying Nintendo will be lucky to sell 2,000 WiiUs, but didn't want the defense force attacking me because they can't sense sarcasm.
@ThomasBW84 Did you happen to notice any mention of the NES Mini potential earnings in the financial report on Wednesday? It's hardware for the holiday, at $60 per unit. I think they could sell a million, that's $60m gross even if net were tiny. My concern is they are planning on under manufacturing like the amiibo, making only 50k or so, which is why they didn't bother putting it in their projections.
I do see it listed at the bottom of page 4 here w/ the release date, but I can't find any $. Surely some investor would have asked about it's revenue potential, no?
https://www.nintendo.co.jp/ir/pdf/2016/160727_3e.pdf
@XCWarrior "I was trying to be nice and sound optimistic."
Well I was trying to be nice and sound realistic. How was I to know you were being sarcastic, you didn't use 1 of these so I was just trying to help educate you. I didn't read your comment as "optimistic", I read it as "uniformed", so I was just trying to inform you.
And you know me, that is way chill for me. I didn't use $%^%$# or capslock or a gif even once. I think the person using the CHILL needs to chill.
@shani: Exactly! Nintendo has a "net gain" and that is significant for a stock that was stagnant at $14-$20 for a very long time. Also significant that this stock once again caught the public's attention. The stock market is highly irrational. Popular things do well. And I do think Nintendo has one or two cellphone craze games in them...so we'll see....
Why is Nintendo not completly the owner of pokemon?
does this mean someone else can buy pokemon the same way Microsoft did with Rare...?
@shani THANK YOU! Someone had to point this out. There's nothing more irrational than the stock market, and people still treat it as gospel. It's as if no one has learned anything since the 2008 crash.
Think it's pretty naive that people thought Nintendo were the sole makers of Pokemon Go when the app is developed by Niantic and the Pokemon Company itself is comprised on Nintendo and 2 other companies including Gamefreak. Just shows how short sighted people are when jumping onto trends hoping for big money.
@rjejr
Nintendo life communuty rules:
Common Decency
The following rules and guidelines on forum decency or "netiquette" are all mostly common sense, but we know some members lack any common sense so we've listed them here for you to review and hopefully abide by
Before you start a topic, perform a search to see if the question or topic you wish to create has been made before. If it has, post in the topic that already exists. Duplicate topics will be closed.
Don't mess with @rjejr or else
.....
Lol the funnies. XD /sarcasm
@Arcanum I'm not entirely sure how to take that, so I'm just going w/ amused.
What a crazy week or two it's been for Nintendo, with the highest highs and the lowest lows we've seen in ages.
@rjejr WOAH THERE CHILLY!
OK, it's settle, we put the over under WiiUs sold the rest of the year at 22,000 and call it a day. That's a pretty chill guess.
CHILI! ....mmm chili.
(we can do gifs in here?)
@Acein210 After seeing your comment enough I gotta chime in! Go gen 1!!
@shani you must be misunderstanding how market share work. The increase in the value of Nintendo stocks didnt give Nintendo any profit. All those shares have already been sold to stock holders, Nintendo will only profit from the increase if theu have still unsold shares stocks which is unlikely since Nintendo havent announced any release of new shares nor plans to increase their capital stocks.
The ones who benefited from the increase are the traders not nintendo. So you cant really focus on nintendo gaining a healthy profit since they didnt profit from it in the first place
@diwdiws Ah my bad, I didn't mean profit but a raise in the market value. Of course the stockholders are the ones profiting from that, not Nintendo!
@dudujencarelli @bluedogrulez Yeah! I also don't understand why hardly anyone recognises that.
@rjejr: Or they just wanted to make more conservative projections after most of their previous projections for Wii U sales were wrong. After all, it's much easier to lower expectations and then surpass those when Zelda: BotW is released on Wii U.
I bet the stupid shareholders would see that as a success and the stock value would rise again (but surely not as much as with Pokemon). If the same thing happened with a projection of 2 million sold units, it probably wouldn't be seen as a success and the stock value wouldn't go up.
But that's just pure speculation on my side, of course.
@XCWarrior (we can do gifs in here?)
Well a lot of my posts are accompanied by a gif. Or a meme. Or an animated something or another. Sometimes it's useful, like a picture of something I'm trying to describe, and sometimes it's just for no reason.
Hard to describe and show it w/o it turning into a pic, but I'll try:
[ left bracket, the letters img, right bracket, then the URL which I usually just copy and paste from the address bar, then left bracket again, then a forward slash / before the letters img again, then finally right bracket ]
I have no idea what this is, but it caught my attention.
@shani "conservative projections"
Well that's the thing I guess, I was just looking for any sort of projection for the NES Mini. Out there, conservative, anything. They made projections for the financial year for Wii U, 3DS and all of their games, but a $60 holiday release console they just ignore? Surely it's expected to contribute something to overall revenue for the year, even if the net earnings are minimal. They always talk about amiibo numbers and those things are only $13 a pop.
@rjejr
Yes the intention was a joke
@XCWarrior Well it looks like I was wrong, Nitneo is trying to sell Wii U this year. The official NoA twitter account just sent out this tweet an hour ago. Do used sales count toward the over/under 22k?
Did you know that the refurbished Wii U is back in stock at Nintendo's Online Store? https://store.nintendo.com/ng3/browse/subcategory.jsp?categoryId=cat570935
Edit: it works! Sweet.
@Arcanum If that's your first embedded gif, you picked a good one.
Ah, investors. That most easily spooked of rare idiot.
As a species they tend to habitate areas in which they do not belong.
Often seen migrating towards new grazing grounds of tasteless schemes and unfounded assumptions.
How much per share is it at now?
It's like any market, you will get price corrections. It's like the price of an old game on eBay after a popular youtuber does a lets play. The price will skyrocket to a point where people are not willing to pay. Then the people who have a copy will see that price and put theirs up for sale. Because there's more supply and less demand all of a sudden the price will drop.
@MussakkuLaden It usually has mre to do with what's got momentum. Once enough people were buying Nintendo shares, the seep jumed on board. Then once enough were selling, more jumped on board.
Investors get too over eager far too easily, just remember the GFC.
@XCWarrior
I'm with you, that dude needs to CHILL for sure.!! Don't make fun of his Wii U numbers, he'll tweeks right out!!!
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