Nintendo Still a good prospect despite share plummet
GameCube destined for greatness. Well, duh!
Mmmmmmmm!
In the light of a recent share price slump (shares fell more than 9% on Friday closing at 19,500) Nintendo is still a strong prospect for the future according to one of Japan’s leading investment specialists.
Mark Headley of Matthews Japan Fund recently stated, “I will tell you one name that's been a great company - Nintendo. It's a technology company that obviously has an incredible global presence. Tremendous branding. Absolutely owns the 5 to 12-year-old market in terms of portable games. I mean the Game Boy is just, there's no competition to it. Try to convince a 10-year-old not to have a Game Boy, and you're in big trouble.”
When asked about the chances of the GameCube against its competition, Headley said, “They only have 1,000 employees. Their GameCube, which is going to be launched in a couple of months, looks to be very competitive at a lower cost and without some of the bells and whistles of [Microsoft's] Xbox and the Sony PlayStation. A very good product in a tough market. Sega has given up. Sony and Microsoft are going to try to pummel each other to deliver the most powerful box in the world, and Nintendo is quietly delivering a very high-quality product." Aside from the endorsement of the GameCube, Headley reveals some interesting information about Nintendo as a company. We assumed, as you probably did, that Nintendo is a massive global super-company with throngs of minions beavering away in secret labs. Only 1,000 employees is a surprising figure.
When quizzed over Nintendo’s current share value and the growth potential of the company, Headley said, “Current consensus looking out a year -- it's close to 30 times earnings. So it's not cheap. But I think it's a great Japanese company with great potential just because of the brand, the positioning, and I have more faith in entertainment than just about anything else in the world. Even in a slow economy, kids get their toys. Especially if you want to spend a little less, you're going to buy that GameCube instead of that Xbox or that PlayStation.”
Things are looking up for Nintendo, despite the recent valuation issues. There is a genuine confidence in the industry for the GameCube, something that is stabilised and consolidated by the ever-popular handheld phenomenon that is the Game Boy Advance.
It seems like the old firm is getting things right at last. Having learnt a few lessons from the newcomers, both Nintendo and Sega are poised on the brink of what could be the most profitable era in the companies’ respective histories.
Mark Headley of Matthews Japan Fund recently stated, “I will tell you one name that's been a great company - Nintendo. It's a technology company that obviously has an incredible global presence. Tremendous branding. Absolutely owns the 5 to 12-year-old market in terms of portable games. I mean the Game Boy is just, there's no competition to it. Try to convince a 10-year-old not to have a Game Boy, and you're in big trouble.”
When asked about the chances of the GameCube against its competition, Headley said, “They only have 1,000 employees. Their GameCube, which is going to be launched in a couple of months, looks to be very competitive at a lower cost and without some of the bells and whistles of [Microsoft's] Xbox and the Sony PlayStation. A very good product in a tough market. Sega has given up. Sony and Microsoft are going to try to pummel each other to deliver the most powerful box in the world, and Nintendo is quietly delivering a very high-quality product." Aside from the endorsement of the GameCube, Headley reveals some interesting information about Nintendo as a company. We assumed, as you probably did, that Nintendo is a massive global super-company with throngs of minions beavering away in secret labs. Only 1,000 employees is a surprising figure.
When quizzed over Nintendo’s current share value and the growth potential of the company, Headley said, “Current consensus looking out a year -- it's close to 30 times earnings. So it's not cheap. But I think it's a great Japanese company with great potential just because of the brand, the positioning, and I have more faith in entertainment than just about anything else in the world. Even in a slow economy, kids get their toys. Especially if you want to spend a little less, you're going to buy that GameCube instead of that Xbox or that PlayStation.”
Things are looking up for Nintendo, despite the recent valuation issues. There is a genuine confidence in the industry for the GameCube, something that is stabilised and consolidated by the ever-popular handheld phenomenon that is the Game Boy Advance.
It seems like the old firm is getting things right at last. Having learnt a few lessons from the newcomers, both Nintendo and Sega are poised on the brink of what could be the most profitable era in the companies’ respective histories.
Companies:
Nintendo
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