I can't comment on the value of the Wii at $250 (i.e. price vs. specs) but I applaud Nintendo for making an affordable next-generation option. I'm not a serious gamer but I can definitely see myself buying a Wii because I'd be able to include my family in the fun. In this case it has a low price and high personal value. This is Nintendo's strategy and I think it will payoff nicely. I know I wouldn't be getting a Blu-ray or HD-DVD drive, but you know what, I probably wouldn't use it anyway.
As an investment, Nintendo is a "pure" gaming play. Some investors/traders sold-off shares following its annual earnings release because of lower projected net income. This is an unavoidable reality when releasing a new console but the damage was a lot lighter than the earnings impact felt by Sony, for instance. That said, investors now seem to understand that Nintendo represents an attractive gaming investment alternative because of its market leadership in handheld gaming and now with its next-gen console pricing.
Nintendo's ordinary shares (Tokyo: 7974) closed prior to the firm's May 24th after market earnings release at 18,920 yen. They opened the following day down at 18,520 yen and traded as low as 17,310 yen before closing at 17,540 yen for a daily loss of 7.3%. Overnight in Tokyo, Nintendo opened higher at 18,540 yen and traded as high as 19,440 yen before closing at 19,240 yen (US$171.25) for a gain of 9.7%.
Nintendo's ADRs are listed at an 8:1 ratio to its ordinary shares. Therefore, the Friday closing price in Tokyo is equal to $21.40 at the current forex rate. It doesn't appear that its ADRs have traded today (see PinkSheets.com) because of the wide bid-ask spread following the jump in its share price overnight in Tokyo. Yahoo! Finance shows it has an average trading volume over the past 3-months of 202,602 shares.
Analyst reactions over the past two days:
Nikko-Citi upgraded Nintendo to "1H" (second highest) from "2H" and maintained its price target at 21,700 yen.
Merrill Lynch Japan Securities rated Nintendo a "buy" and said in a report that it didn't see any reason for there to be weakness in its stock. ML is maintaining its 21,000 yen target.
Mizuho Securities maintained its "2" rating (second highest) but lifted its target share price to 20,500 yen from 18,500 yen.
Mitsubishi UFJ Securities was the only one to come out with a "negative" report on Nintendo -- even Merrill Lynch was positive. Basically Mitsubishi UFJ feels like its forward P/E is a bit high so it is maintaining its "4" rating (second lowest).
NTDOY 1-yr chart: