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Fisher Capital Management Investment: Nintendo Shares Fall 5-Yr Low After Wii U Revealed
Fisher Capital Management Investment: Nintendo Shares Fall 5-Yr Low After Wii U Revealed
Nintendo's market shares dropped to pre-Wii levels after the reveal of its upcoming Wii U console at E3 2011.
Birmingham,
Alabama,
United States of America
(prbd.net)
09/07/2011
http://www.tomsguide.com/us/Wii-U-Satoru-Iwata-Market-Shares-Stock-Investors,news-11457.html
8:20 PM - June 8, 2011 - By Kevin Parrish -
Source : Reuters
Nintendo's market shares dropped to pre-Wii levels after the reveal of its upcoming Wii U console at E3 2011.
In previous reports we revealed that the gaming industry is currently walking on uncertain ground – uncertain because the expected next phase didn't take place as planned thanks to the release of Apple's iPhone and the introduction of apps. Gamers discovered that cheap, bite-sized games can be just as enjoyable, and then began to flock around free social games like FarmVille which don't require a hefty purchase, outrageous hardware requirements or installation on the local drive.
So for a while developers and publishers have wondered "what's the next phase?" Even recently The Sims creator Will Wright admitted that it's foolish to develop a game longer than a year because the "rate of change is increasing almost exponentially." There have even been fears of another gaming market crash if another round of consoles doesn't appear or if the industry doesn't shift over to socialization and monetization.
But as seen on Tuesday, Nintendo wants to serve up another round of consoles. And why not? That's been its gig since the late 1970s. Gaming executives are now reportedly banking on the Wii U's success to reignite the $65 billion video games industry that has steadily declined in profit over the last few years, leading some to speculate an eventual crash. Wedbush analyst Michael Pachter even thinks Nintendo is now ahead of the curve for once, revealing that its upcoming platform – consisting of a base HD-capable console and a unique controller with a built-in screen – can do gaming better than the iPad 2.
Unfortunately, Nintendo investors seemingly don't agree with the idea, as market shares suddenly dropped to a five-year low after the company revealed the new console during the show. The Wii U is aiming to win back the hardcore gamers it lost with the previous family-oriented Wii machine. Investors are worried that Nintendo is putting too much focus on hardware and ignoring the industry shift over to social networking.
"Although some experts seem to like the new device, I expected Nintendo to move more into the social networking business," said Mitsuo Shimizu, deputy general manager at Cosmo Securities in Tokyo. "It's a warning from investors that the company should reconsider its business strategy and move more aggressively into social gaming operations."
Reuters reports that Nintendo shares closed down 5.7-percent in Japan on Wednesday, reaching low levels not seen since before the launch of the original Wii in late 2006. But Nintendo seems stuck to its guns in addressing the hardcore gaming audience this time around despite complaints of a lack of social networking features by critics and the press.
"It's not that we're negative about the network, but if we ignore those customers who don't link their game consoles up to the Internet, that goes against our strategy of expanding the games market," Nintendo's president Satoru Iwata told reporters in a roundtable. "We are just trying not to shrink our own market." He also pointed out that the company's hit games had always been social.
The Nintendo Wii U is currently still in development, and is not slated to hit the market until sometime between April and December 2012. Sony's handheld PlayStation Vita, on the other hand, is slated to arrive this holiday season sporting PlayStation 3 graphics and 3G connectivity.
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