Analysts' Comments Move Nintendo and Sony in Opposite Directions

Includes: NTDOY, SNE
by: Steven Towns

Yesterday I wrote about Nintendo's (OTCPK:NTDOY) run not being over yet, citing a Daiwa Research report and mentioning the impact of foreign exchange profits. I also wrote about Mitsubishi UFJ's downgrade of Sony (NYSE:SNE) based on a substantially lower estimate of expected initial PS3 shipments. Japanese market participants reacted to these analysts' reports today sending Nintendo 4% higher and Sony nearly 3% lower on a day in which the Nikkei 225 lost 1.25%.

I would like to mention two more things. The first is that Nintendo has benefited from the popularity of its handheld DS Lite console and attractive game titles. The DS Lite had a big day today when the Final Fantasy III game went on sale drawing long lines and likely boosting Nintendo's share price. Nintendo's ordinary shares (Tokyo: 7974) closed higher by 4.09% at 23,390 yen ($25.15 ADR equivalent).

Secondly, Nintendo is set to further benefit this November when it launches its Wii console because of its competitive price. There is no questioning the U.S. economy, which is a key market for any game manufacturer, is slowing. But gamers of all types will no doubt be buying the new consoles and children will be begging parents over the holidays and it is clear that Nintendo will be the favorite given its price tag that's less than half the PS3 and lower than Microsoft's (NASDAQ:MSFT) Xbox 360.

Regarding Sony, the news isn't getting any better. There was a report today that two cases have been reported of Sony-made notebook PC batteries catching fire in Japan. The Japanese government has reportedly requested Sony and Dell (DELL) to investigate the cases and prevent further incidents.

Sony's ordinary shares (Tokyo: 6758) fell 2.86% to 5,100 yen ($43.87).

Sony (SNE) and Nintendo (OTCPK:NTDOY) 1-year comparison chart: