Nintendo Suffers at Hands of Speculators

The mere fact that a company makes huge profits, is resurgent despite having been called dead (well, moribund at least) and has two of the most talked-about pieces of hardware is still not good enough to keep the speculators happy. Nintendo, the over-achiever in video gaming for the last two years - has seen its share price fall by one third in value in the last three months.

Reuters quotes Mr Yoshihisa Okamoto, a fund manager at Mizuho Asset Management, as follows, "This has little to do with the company itself, but a lot to do with market sentiment.

"In the current market environment, investors rush to sell at the first sign of negative developments or exhaustion of positive news."

The stock markets in the USA, Japan and Europe have all recently felt tremours relating to poor decision making by bank lenders. This has also lead to lower consumer spending... stop yawning at the back, this is important for gamers!

Speculators have, therefore, been selling stock in order to recoup cash. One of those stocks has been Nintendo - which in most other areas has been doing spectacularly well. The one stand-out fault has been in terms of supplying hardware to eager consumers.

Rakuten Securities analyst Yasuo Imanaka states, "In the United States and Europe, shortages of the Wii and DS are getting serious. Nintendo will surely boost production in the next business year.

"And higher output will lead straight to higher sales of its game machines and game software. I think we are going to see Nintendo chalking up strong profit growth next year, again."

Strong profit, however, does not seem to please investors who appear to be more frightened than Bambi in a gunshop on Mothers' Day.

We can only hope that Nintendo gets hardware into the shops early - and often - and that internal corporate fears about stock doesn't lead to a further strangulation of creativity and a reliance on re-makes or re-hashes on the software side.






^{Source: Reuters}