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jhaw (93.12)

Nintendo Out

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June 22, 2009 – Comments (2) | RELATED TICKERS: NTDOY.PK

Today I ended my outperform pick for Nintendo.  I originally picked Nintendo in November of 2006 because the Wii looked like a blockbuster product, and the DS was clearly establishing itself as the leader in handheld gaming devices.  My final score was +53.53.  The stock itself was up only around 18% during this time, but the S&P 500 tanked 35% in the same period, so I am very happy with this result.

Nintendo is a great company with outstanding products that have revolutionized the video game indsutry.  But we are in the middle of the current console cycle, and it is not clear what's next for the company.  In my opinion the risks have increased and the potential rewards have decreased, so now is a good time to get out.

2 Comments – Post Your Own

#1) On June 22, 2009 at 12:32 PM, Melaschasm (94.12) wrote:

You may be right.  However, a recent story that Activision is considerng a reduction in support for the PS3, could be a minor bull signal for Nintendo. 

Personally I think Nintendo has a little farther to run, but as someone who is not a big fan of timing the market to the day of max returns, taking a healthy profit now is a reasonable choice.

Good Luck.

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#2) On June 22, 2009 at 1:41 PM, DownEscalator (98.37) wrote:

I heard a news item the other day that XBOX, Sony, and others were working at post-Wii models.  The Wii proved to everyone that console buttons were a hinderance to many getting involved in gaming and every other company in the market is coming out with next-step models that may prove to be superior products to the Wii long-term.  I think you made a good move getting out now as the Wii has had a relatively long time of being the "it" console.

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