The Rise of Nintendo
In November '05 a year before the Wii's release Nintendo (NTDOY.PK) shares were around today's prices in the high $13's. They rose up to the Wii's launch and in Nov '06 NTDOY sold for $29.75. But we're less than 4 months from the 1st major Gaming Console in 6 years, the Wii U...and the stock hasn't been on the rise. In fact it's fallen to several new 52 Week lows in just the last couple months.
So what gives? We're way more interested in Apple's (AAPL) iPhone 5 fall release than in the next Gaming Console. Plus games and gamers have moved on, right? Or have they. As we've seen with Zinga (ZNGA) the Farmville's (a term I'm using for that entire generation of games) look more like a fad. And sure, Words With Friends, Angry Birds, and Cut the Rope are good games, but they are severely limited in scope. Plus, smart-phones and tablets don't have buttons and they're simply not Gaming Consoles.
With Nintendo's new console you'll have a full-blown touch-screen built into the main controller, you'll be connected to millions of gamers in Nintendo's social-gaming network "Mii-Verse," and you'll be able to download games straight to your Wii U just like today's Gaming Apps. Nintendo has simply integrated every crucial feature of modern games into its new console as secondary features.
The savvy investor I think sees Nintendo has likely come back from the grave - and then some. With touch-screen, gyroscope, motion-control, and a 2nd Screen, games on the Wii U are basically unlimited in scope. You can play Angry Birds, "the Farmville's", Super Mario's & NIntendo classic franchises, and even "hardcore" games like World of Warcraft, Grand Theft Auto, and 1st Person Shooters. This seriously looks like the Swiss Army Knife of video games allowing you to play every game imaginable.
Game Developers have several new gaming dimensions they've never had before. Nintendo's pushed boundaries even past that of Microsoft's (MSFT) XBox and Sony's (SNE) Playstation 3. Developers are still discovering Wii U's frontiers.
With 6 full years passed since the last console, the public is chomping at the bit for a new console. The Nintendo faithful will be all over Wii U at Christmas. Wii owners will gladly give Wii U a shot. Hardcore gamers will buy it since they get to play their shooter's, and XBox and Playstation owners will buy it because Microsoft and Sony are still a year to two years away from their next-Gen.
The public didn't quite get the Wii at first. They had to see and try it in action, and word of mouth made it spread like wildfire. It was a visionary machine that Microsoft and Sony promptly copied. It will be the same with Wii U, I think. People just haven't seen anything like it. Nintendo's prospects look really, really exciting.