The stock of Nintendo Co. (OTCPK:NTDOY), the purveyor of Wi game consoles and gameboys, trades on the Japanese markets, reducing direct access to many investors in this booming stock. An investor can purchase an American Depository Receipt which is directly correlated to the performance of Nintendo Co. on the OTC market, which in all honesty inherently contains more risk due its lax regulation and oversight. However, with a blue chip company such as Nintendo, many of the risks associated with the OTC market are minimized.
To say Nintendo has enjoyed success with its revolutionary Wii console is an understatement. This exceedingly popular game console appeals to a previously untapped and expanding audience of gamers. The casual social gamer. For August, Wii trounced its competitors in terms of console sales: Wii sold 403,000 units, Microsoft's (MSFT) X-box sold 276,000, and Sony's (SNE) PS3 sold 130,000. Moreover the Nintendo also doubled the 150,000 PSPs by selling 383,000 units of Nintendo DS. Recently, Nintendo revised upwards their projected fiscal year unit sales from 14 million to 16.5 million.
The main concern regarding the Nintendo Co. is the supply chain. Since ramping up projected sales estimates concerns have surfaced in terms of the amount of consoles, Nintendo is capable to producing. In the broad spectrum of problems, however, to have too much demand is tolerable. Wii stock has been on a tear over the past year (read here: accumulate on dips) and much future success is priced into the current stock price. However, over the coming holiday season the Wii ought to serve as the perfect gift, resulting in exciting earnings in the coming quarters.
NTODY 1-yr chart