A New Strategy and the “Switch” Console are Just What Nintendo Stock Needed
Nintendo Co., Ltd. (ADR) (OTCMKTS:NTDOY) is enjoying a revival these days. The famous maker of video games received more attention than it could handle last summer, thanks to the popularity of Pokémon Go. While only indirectly involved with that game, Nintendo stock is up about 77% year-to-date. And here’s the good news: as bullish as that might seem, the pertinent factors that could propel NTDOY stock higher are just beginning to appear.
Nintendo has faced some difficulties in the past. For a company specializing in gaming consoles, its last model, the “Wii U” was a failure. It didn’t appeal to gamers, which made game designers reluctant to create games for it. This produced a vicious circle, the results of which are poor earnings and a bearish Nintendo stock outlook.
Nintendo Has Gained from the Pokémon Effect
The Pokémon effect, even if Nintendo had a minor role (being just one of many developers), proved a real boon for the company and for NTDOY stock. The game, which had children and grown adults walking in front of moving traffic and stumbling in water as they looked for hard-to-find Pokémon like “Pikachu,” made Nintendo stronger. This added conviction about the company’s plans for expanding its augmented reality (AR) lineup, new game consoles, and smartphone-ready games.
There are long-term and short-term benefits. AR technology can be adapted for uses well beyond gaming and entertainment. Imagine what a tour operator might do with such technology to feature a destination or vacation package. Even the military can use it for training. (Source: “Augmented Virtual Reality Emerging as Game Changer for Marine Corps Training,” Defense News, December 10, 2015.)
The Pokémon craze acted as a catalyst, jump-starting the first collaboration between Nintendo and Apple Inc. (NASDAQ:AAPL). In the forthcoming Christmas season, look for Super Mario Run. It’s a game app that Apple will include in its new “iPhone 7” starting in December.
NTDOY stock could make its next big move in the new year.
This New Combo Gaming Console Could be Huge for Nintendo Stock
The new year is when Nintendo will have another shot at making its mark in the battle for home gaming console domination. By all accounts, Nintendo has a winner on its hands. On October 20, the Japanese video game giant introduced a hybrid machine, which easily allows users to play both at home and outside. It’s coming to stores in March 2017.
So far, Nintendo has unveiled a video for the new “Nintendo Switch” (formerly called “Nintendo NX”) machine.
The Nintendo Switch will replace the unlucky Nintendo Wii U, which never managed to find the right audience, succumbing to the Sony Corp (ADR) (NYSE:SN) “PlayStation 4” in the contest for sales. The reason investors, whether or not they care about gaming, should get excited is that the Nintendo Switch has already gotten gamers excited. (Source: “Nintendo Switch: watch the first trailer for the new console,” The Verge, October 20, 2016.)
The Nintendo Switch is a “combo.” It has detachable controllers and a removable screen. This allows for the on-the-go use capability. Picture legions of commuters, around the world, playing games on a Nintendo Switch machine while sitting on a bus, a subway train, or in an airport lounge. Such an image comes naturally, because it’s precisely what Nintendo wants to achieve. That’s the concept that should end up delivering big sales numbers.
As for gaming specialists, the Nintendo Switch can entice them, boasting collaboration with major publishers in the video game industry. These include American companies Activision Blizzard, Inc. (NASDAQ:ATVI), Electronic Arts Inc. (NASDAQ:EA), and Ubisoft Entertainment SA (EPA:UBI), as well as many Japanese companies, such as Capcom, Sega, and Konami.
This will please gaming experts. If you’re just an investor on the hunt, all you need to know is that having all those publishers onside bodes well for Nintendo stock’s performance in 2017.
The lack of support from these same major game developers played a huge role in killing sales of the Wii U, dragging Nintendo stock down with it. This grand return to the gaming console world and the strategic shift starting in smartphone apps—after ignoring their potential—has revived the company and the prospects of NTDOY stock investors.