Nintendo Is Set To Collapse With Apple's Help
Douglas Ehrman • 16 Comments
Douglas Ehrman • 16 Comments
Nintendo Is Set To Collapse With Apple's Help
Douglas Ehrman • 16 Comments
Douglas Ehrman • 16 Comments
Jul. 18, 2014, 2:07 PM
- After rising 57% Y/Y in May due to new game launches, U.S. retail physical game sales fell 3% in June to $286.8M, per NPD. But with June 2013 having a stronger launch title lineup, that figure was better than expected. Sales were also still up over 4% from a May level of $274M.
- Ubisoft's (OTCPK:UBSFY) Watch Dogs was the top-selling title for the second month in a row. Electronic Arts' (EA +3.1%) UFC (launched on June 3) was #4, and FIFA 14 (receiving a World Cup boost) was #5. Titanfall (#8 in May) fell out of the top-10.
- Activision's (ATVI +1.2%) Call of Duty: Ghosts rose 2 spots to #8. But The Amazing Spider-Man 2 (#6 in May) dropped out of the top-10.
- Take-Two's (TTWO +4.1%) NBA 2K14 (boosted by playoff interest) rose a spot to #6, and GTA V came in at #10. Nintendo's (OTCPK:NTDOY) Mario Kart 8 and Tomodachi Life were respectively #2 and #9.
- With the help of Microsoft's cheaper Xbox One package, hardware sales rose 106% Y/Y to $292.7M. Together with the software numbers, that's providing a lift to GameStop (GME +4.4%).
- EA reports on July 22, while Activision and Take-Two both report on August 5.
Jun. 6, 2014, 3:58 PM
- Struggling to cope with soft Wii U sales, Nintendo (NTDOY) has decided to close its European HQ (based in Großostheim, Germany). 130 workers will be laid off, and Nintendo will now run its European ops out of its Frankfurt office.
- The move comes after Nintendo reported a $229M net loss for the fiscal year ending March '14. Wii U sales totaled only 2.72M during the year (far below an initial forecast of 9M), and just 310K in the final quarter. By contrast, Sony sold 7M PS4 units in the console's first 5 months of availability.
- Nonetheless, Nintendo forecasts a ¥40B ($390M) profit for the current fiscal year. Wii U sales are expected to total 3.6M, and 3DS sales12M.
May 7, 2014, 7:50 AM
- Nintendo (NTDOY) expects to sell 3.6M Wii U consoles this fiscal year after moving 2.72M for the just-ended year.
- Though analysts might be giving the company a pass on the console guidance, on profit estimates they are a bit more strict. While Nintendo forecasts a FY15 operating profit of ¥40B ($393M), the consensus estimate from analysts is at ¥29.58B ($290M).
Apr. 2, 2014, 11:58 AM
- The rumors were true: Amazon's (AMZN +0.6%) new streaming set-top will support "thousands" of Android games by next month (live blog). To play them, Amazon is providing an optional $40 controller that comes bundled with 1,000 Amazon coins (normally retails for $9.50) to buy games with, and a tablet controller app. A small number of titles can be played with the Fire TV's bundled remote.
- Electronic Arts (EA -0.9%), Take-Two's (TTWO +0.2%) 2K Games unit, Sega, Gameloft, and Disney are among the game developers on board. Amazon, as reported, will also be developing its own titles. The Verge: "The graphics are pretty solid, they seem about on par with what you can get on top-end Android devices. It's not lagging at all."
- Should Sony (SNE -0.6%), Ninetendo (NTDOY), and Microsoft be worried? The Fire TV, and perhaps also gaming set-tops reportedly on the way from Apple and Google, are unlikely to compel hard-core gamers to ditch their PS4s and Xbox Ones. But much like mobile devices, they could gain a strong following among consumers wanting a cheap, simple, casual gaming experience.
- The Fire TV itself will sell for $99 - the same price as Apple TV and Roku 3. It begins shipping today.
- Earlier: Amazon unveils Fire TV set-top
Jan. 28, 2014, 10:54 AM
- Multiple sources tell VG 24/7 Amazon (AMZN +1.3%) plans to launch "a dedicated games and entertainment device this year priced below $300." Not surprisingly, the device reportedly runs on Android and is the work of Amazon's secretive Lab 126 unit (responsible for its Kindle hardware).
- Amazon is said to be meeting with game publishing execs to brief them on the hardware, and has used popular Android/iOS titles to demo the device.
- The report comes after Amazon sent out an invite for a developer event in which the company claimed it's "working on a new revolutionary [Version 1] product that will allow us to deliver Digital Media to customers in new ways."
- There were several reports (I, II) last year stating an Amazon set-top is in development, with some claiming the device would also act as a console. The Verge reported in October Amazon's box had been delayed.
- Google is also reportedly working on an Android set-top/console, and Apple is reportedly planning to launch a refreshed Apple TV with game support.
- Amazon, Google, and Apple's rumored devices are all seen trying to disrupt the traditional console market by offering cheaper casual gaming/video-streaming systems that support the rapid porting of mobile games. If the reports pan out, Sony (SNE +1%), Nintendo (NTDOY), and Microsoft (MSFT) won't be thrilled.
Jan. 27, 2014, 9:45 AM
- Cisco (CSCO -0.9%) has been cut to Underweight by JPMorgan ahead of its Feb. 12 FQ2 report.
- MercadoLibre (MELI -1.7%) has been cut to Underperform by BofA/Merrill. Shares tumbled last week, partly on account of Venezuelan/Argentine forex swings.
- Xerox (XRX -1.5%) has been cut to Market Perform by BMO after missing Q4 revenue estimates on Friday.
- Cavium (CAVM +1.6%) has been upgraded to Outperform by Wedbush ahead of Wednesday's Q4 report.
- Xoom (XOOM +8%) has been upgraded all the way to Strong Buy from Market Perform by Raymond James. Q4 results are due on Feb. 4.
- RetailMeNot (SALE +3.2%) has been upgraded to Buy by Goldman. Q4 results arrive on Feb. 6.
- SMI (SMI +9.4%) has received a two-notch upgrade to Buy by UBS.
- IDT (IDTI -4.1%) has been cut to Underweight by Barclays.
- Nintendo (NTDOY) has been cut to Sell by Goldman. Shares fell 2.2% in Tokyo.
Jan. 17, 2014, 11:23 AM
- Nintendo (NTDOY -14.9%) shares plunge after the company reversed itself on projections, issuing guidance for a ¥35B loss in the FY ending March.
- Jefferies, however, raised its PT to ¥29K (shares currently trade at ~¥14.6K) and reiterated a Buy rating, noting that "Our Buy thesis on Nintendo has been predicated on the company missing the President's 'commitment' of ¥100b OP and being forced to change."
- Jefferies predicates its contrarian view on the notion that Nintendo's failure will force it to move into mobile: "We believe Mario on mobile is coming."
Jan. 17, 2014, 3:48 AM
- Nintendo (NTDOF) has warned that it expects an operating loss of ¥35B ($336M) for the fiscal year through March instead of a profit of ¥100B, as the company had previously forecast. Analysts predict ¥54.7B.
- Nintendo also projects a net loss of ¥25B vs a previous outlook for a profit of ¥55B, and it has cut its revenue estimate by 36% to ¥590B. The company will pay an FY dividend of ¥100 instead of ¥260.
- Nintendo said the dramatic reversal was due to much lower-than-expected sales of its Wii U and 3DS games machines during the holiday season. That might have something to do with the success of Sony's (SNE) PlayStation 4 and Microsoft's (MSFT) Xbox One, both of which were launched in the run up to Christmas.
- Nintendo now expects FY Wii U sales of 2.8M instead of 9M and 3DS sales of 13.5M vs 18M. The firm also cut its software outlook. (PR here and here.)
Jan. 7, 2014, 3:06 AM
- China's State Council has temporarily lifted a 14-year old ban on the sale of foreign computer-gaming devices, opening the way for Microsoft (MSFT), Sony (SNE) and Nintendo (NTDOF) to enter a market that was worth almost $14B in 2013.
- "Foreign-invested enterprises" will be allowed to sell machines made in Shanghai's new free trade zone.
- However, Nintendo expressed skepticism at the ruling, saying it's not much different from when China's government said in September that it planned to relax the ban. "This just means one step of the process has been taken," Nintendo said.
- Foreign consoles have long been sold illegally in China, although online PC gaming is more popular.
Dec. 3, 2013, 3:35 PM
- Nintendo (NTDOY -3.9%) is on the cusp of another Wii U sales disappointment, Bloomberg reports.
- In Oct., President Satoru Iwata stated the console and game maker would meet its forecast of ¥100B in profit and 9M Wii U units sold. Analysts have been skeptical, seeing ¥57B in profit and sales of 6.2M units instead.
- Sparing no words, Wedbush's Michael Pachter said, "[Nintendo] steadfastly refuse[s] to consider that the product is not interesting to consumers ... They will fail to hit 9 million, and they will likely miss their profit goals."
- In the first nine months of the year, the company sold only 850K units. Games sales are lagging as well, with 6.3M units sold in the same period vs. the company's annual forecast of 32M units. Nintendo already cut the price of the Wii U by $50 in an effort to bolster sales back in Aug.
Nov. 4, 2013, 12:17 PM
- Nintendo (NTDOY +0.2%) will roll out a smaller version of its now-retired Wii console called the Wii Mini in the U.S. in the next 2 weeks. It will be priced at $99.99, and buyers will get a copy of Mario Kart Wii for free. The move comes before the important holiday season.
- Previous: Nintendo jumps through window left by console lull before launches
Oct. 21, 2013, 1:52 PM
- Nintendo (NTDOY) officially ends production of the Wii, the console that ended up outselling both the Xbox 360 and Playstation 3 with worldwide shipments of ~100M, to focus on the Wii U, whose sales have been decidedly lackluster (albeit improving).
- Previous: Nintendo to cut the cord on the Wii in Japan
Oct. 18, 2013, 4:45 PM
- Sept. sales results from NPD show that Nintendo (NTDOY.PK) has taken advantage of the lull before Sony and Microsoft debut next gen consoles next month. The 3DS was the top-selling device (handheld and console) for the 5th straight month while sales of the Wii U have tripled thanks to a price cut and the release of "Legend of Zelda: Wind Walker HD."
- Although the spurt may be short-lived, the data demonstrates how different Nintendo's uptake pattern is to those of Sony and Microsoft. Rather than "the high impact splash and 'Day One' madness that Xbox and Playstation releases tend to generate, both the 3DS and Wii U have benefited from the long game, gaining sales over time through the release of high-profile exclusive software titles and strategic price cuts," GigaOM observes.
- The niche strategy is high-risk, but also may help Nintendo carve a place for itself in a market where 2 other titans square off and counteract each other as almost perfect substitutes.
- Nevertheless, shares of Nintendo are down 19% from highs notched in July after the company was skipped over for inclusion in the Nikkei 225, an event on which speculators had driven shares higher.
Oct. 2, 2013, 7:13 AM
Sep. 27, 2013, 10:13 AM
- China's State Council says gaming consoles, banned since 2000, will be allowed for sale provided they're approved by the Ministry of Culture. The decision opens the door for Microsoft (MSFT +1.1%), Sony (SNE -0.7%), and Nintendo (NTDOY.PK) to begin officially selling their hardware in the Middle Kingdom.
- Unofficially, the hardware hasn't been hard to find on the black market, with sellers typically hawking modified systems that support pirated games. However, the government's decision should open the door for console makers and game developers (EA, ATVI, TTWO) to formally market their wares, replete with Chinese-language translations.
- Aside from piracy, China's well-established online gaming scene will serve as a challenge for console makers and game developers. Some of the online gaming firms they'll be competing against: TCEHY.PK, NTES, GA, GAME, PWRD, CYOU.
- Microsoft just formed a 49:51 console JV with local firm BesTV.
- Previous: Chinese government reportedly planning to end console ban
Sep. 13, 2013, 12:25 PM
- NPD estimates U.S. physical retail video game sales rose 21% Y/Y, reversing July's 19% decline as new titles stoked demand ahead of this fall's console refreshes. Games launched in August accounted for over half of all sales, and their high price tags resulted in ASPs rising 25%.
- GameStop (GME +5%) investors are pleased with the numbers. So are Electronic Arts (EA +2.7%), and Take-Two (TTWO +3%) investors; while still important, NPD's figures matter a little less than they used to for game developers, thanks to a shift towards digital revenue streams.
- Not surprisingly, hardware sales fell 40% Y/Y (worse than July's 34% drop), as gamers wait for the chance to buy a PS4 or Xbox One. Sales of accessories, including Skylanders (ATVI +0.6%) toys, rose 7% after falling 3% in July. Nintendo's (NTDOY.PK) 3DS was the best-selling console; 6.47M units of the handheld console have been sold in the U.S. in 2013.
- Though its first-week sales disappointed, EA's Madden NFL 25 was the month's best-selling title. Take-Two's anticipated Grand Theft Auto V launches on Tuesday.
- Analysts expect GTA V to pull in $1B+ in sales in Take-Two's FY14 (ends March '14). Pac Crest downgraded Take-Two earlier this week, arguing (among other things) the company has an "empty pipeline" and that there's "potential for changes" in Take-Two's relationship with GTA franchise developer Rockstar Games.
Nintendo Co., Ltd. manufactures and markets home-use video games. The company also produces related software used in conjunction with its television-compatible entertainment systems. Nintendo diversifies its business by seeking to offer new applications of video game systems, such as e-mail... More
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