Nintendo Stocks See Second Day of Decline on Wii U News

June 9, 2011 -

Nintendo has suffered its second substantial drop in its stock price just days after its E3 press conference where it announced the Wii U console and controller. On Wednesday the company saw a 5.7 drop in its stock price and today it dipped an additional 5.2 percent (as of this writing). The consecutive declines for the Japanese console maker came after the company announced its new console, but the exact cause is up for interpretation, according to one Japanese financial analyst.

According to Mitsushige Akino, a chief fund manager at Ichiyoshi Investment Management, the decline has more to do with a perceived shift in the broader videogame universe.

"The product itself is not bad–market expectations had been far too high," Akino told the Wall Street Journal. "..it is also a reflection of structural issues caused by a transformation within the market."

Akino went on to say that Nintendo faces a different consumer landscape than when it launched the Wii, which attracted a lot of casual gamers. Many of those same gamers now prefer to play online games that don’t require a console, he claims.

But the truth is that Nintendo's messaging for Wii U was flawed, convoluted and confusing. The company interchanged the terms "controller" and "console" during its presentation, leaving even experts in the media confused about what the Wii U was supposed to be. Eventually Nintendo clarified the message, saying that Wii U was in fact a new console, but said that it didn't like to throw around specs.

Unfortunately for them, consumers, the media, and investors like technical specs because they enjoy clarity. And in the case of Wii U, those specifications could have cleared up the confusion about whether it was simply a new add-on for Nintendo’s existing system or a full-blown console.

Luckily, Nintendo partners IBM and AMD have helped reveal some of the technology powering Wii U, but those details may have eluded jittery investors.

Thanks to Andrew Eisen for the tip.

source: WSJ


Comments

Re: Nintendo Stocks See Second Day of Decline on Wii U News

Do the casual gamers that Nintendo made so much cash on with the Wii really watch trade show videos? I'd warn caution from these early reactions since really only the industry and hardcore gamers are paying attention.  Still, the point that many casual gamers have shifted to free online gaming is well taken.  Nintendo was successful in marketing Wii Sports as a new and interesting experience to this type of gamer but they were never able to really follow it up successfully. 

In the end, gimmicks like a hybrid handheld console/controller aren't going to win back Nintendo's casual market.  They need a new game that resonates with casual gamers and non-gamers as Wii Sports did 

Re: Nintendo Stocks See Second Day of Decline on Wii U News

And once the Wii U launches, people who bought their shares for dirt cheap see nearly a ten-fold return in their investment.

Racketeering 101.

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Re: Nintendo Stocks See Second Day of Decline on Wii U News

I can see the WIIs apple but this is 10 years to late.....even the default wii mote is more advanced than it is......


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Re: Nintendo Stocks See Second Day of Decline on Wii U News

Me and a buddy got into an argument over whether the controller is a "tablet" (yeah it is). While I do believe this system could pose a lot of potential for the industry (cause I understand games to a "T"), I can see why non-gaming stockholders feel a lot differently.

I seriously hope a post-E3 press conference can turn things around.

Re: Nintendo Stocks See Second Day of Decline on Wii U News

i'll bet the stocks went down only because announcing a new console that is not available yet will hurt the sales of the Wii - people who don't have a Wii (are there any left?) will wait for the new one once they announce it. So I think the stock drop is a short-term thing since investors know Wii sales will drop even faster now. I wouldn't worry unless the 3ds keeps tanking...

Re: Nintendo Stocks See Second Day of Decline on Wii U News

...or it could be manipulators pushing the stock prices down so they can buy more shares.  There are many types of schenanegans that get played within financial markets. 

Re: Nintendo Stocks See Second Day of Decline on Wii U News

Wow, really?

I had no idea anyone was unclear on the fact that the tablet thingy Nintendo showed off was the controller of it's new console.

 

Andrew Eisen

Re: Nintendo Stocks See Second Day of Decline on Wii U News

Yeah, people... meaning people who read summaries on places like wired and CNN focused so heavily on the controller (and mention of backward compatiblity) that the narrative became that Nintendo was simply releasing a new exotic controller for the Wii rather then 'this is the controller for a new system'.

Re: Nintendo Stocks See Second Day of Decline on Wii U News

Frankly I think the problem starts at the name... considering Nintendo's history of console naming schemes, "Wii-U" sounds like an add on instead of a new console. If Nintendo had given the console a completely new name it would have seperated any thought that it was related. Added to this is the E3 anouncement  trailer for the Wii-U which spends its whole time focusesd on the controller; it even starts off with the player playing a known wii title of all things. At no point throughout the whole trailer does it even mention the word "New console". Looking at just the trailer its easy to think that they are talking about a new controller for the wii and not a whole new console.

Re: Nintendo Stocks See Second Day of Decline on Wii U News

To me Wii-U sounds like someone sneezing.


Re: Nintendo Stocks See Second Day of Decline on Wii U News

Perhaps, but if you were actually watching the conference, I think it was pretty clear what they were talking about.

But hey, if a lot of people in attendence didn't get it, then Nintendo didn't communicate it effectively.

 

Andrew Eisen

Re: Nintendo Stocks See Second Day of Decline on Wii U News

on G4TV, who had exclusive coverage and was on-site, the hosts were pretty confused and had to ask Reggie Fils-amie directly about it. Adam Sessler no less - no slouch when it comes to understanding the industry and it's marketing presentations - I think he's a member ;).

I think the confusion came from ninty intentionally avoiding the word 'console' during their presentation and avoiding showing the actual console, which Reggie confirmed when asked. if you had watched the G4 coverage, it was obvious people were confused but I knew going into it there was going to be a new console so I wasn't all that confused.

 
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