MarioKart, Pokemon, Zelda, Super Smash Bros. How much fun is Nintendo games! But should we invest? Find out with my Nintendo Stock Analysis.
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Great For Beginners
Invested – Danielle Town and Phil Town (Great introduction to value investing)
Rich Dad, Poor Dad – Robert Kiyosaki (Mindset and Motivation)
The Barefoot Investor – Scott Pape (Day to Day Financial Planning)
One Up On Wall Street – Peter Lynch (Full of Gold)
Great For Getting Deeper into Investing.
The Little Book of Common Sense Investing – Jack C. Bogle (Index Strategy)
The Little Book The STILL Beats the Market – Joel Greenblatt (Simple Strategy)
The Acquirer’s Multiple – Tobias E Carlisle (Simple Strategy)
The Dhandho Investor – Mohnish Pabrai (My Favorite Investor)
100 Baggers – Christopher Mayer (My Favorite Book)
The Education of a Value Investor – GUY SPIER (Advanced Mindset for Serious Investors)
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Nintendo’s Place in the Industry
So remember, Nintendo is a gaming producer and a hardware producer. And the hardware part of the business, think the Nintendo Switch Console, makes up a big part of the revenue.
Nintendo’s total sales of Switch hardware and software surged 122% year-over-year last quarter.
Its Switch shipments rose 43% to 3.05 million,
Its total shipments of Switch software also jumped 123% to 5.04 million.
But Nintendo are not releasing a new Switch console this year, whereas rivals Sony and Microsoft have new versions of their Playstation and Xbox coming out before christmas.
So that will obviously help those companies, but I don’t think it will necessarily be a problem for Nintendo.
I think it won’t be a big issue is because
Nintendo produces exclusive games that are made only for their hardware. Its top franchises include;
and Animal Crossing
aren’t available on PCs or other gaming consoles. Therefore, anyone who wants to play those games will need to buy a Switch console.
Nintendo’s ecosystem is sticky, with over 200 million Nintendo accounts created worldwide, and its Switch Online service now has 26 million subscribers.
Longer Term Outlook
The trends in the gaming industry are not going away. The industry continues to grow with the advancement of technology. My thesis around the industry is that as 5G rolls out and more and more powerfully computing continues to give us better experiences, gaming will get better, better as well.
I think it is one of the best industries in the world for the next 10 years, actually I think it is one of the safest industries in the world as well.
All those 200 Million Nintendo user accounts, and the 26 million Switch accounts are still growing. This gives Nintendo opportunities to follow the other companies into a strong subscription based model. The user base is huge, so this gives Nintendo a lot of options.
MarioKart is just a classic, that is still as popular as it was 20 years ago. And think about Pokemon. Pokemon was massive when I was about 10 years old, and it is still a massive franchise.
Can you imagine when virtual reality gets better, and we are running around Celadon City, living the pokemon trainers life!
7974.T or NTDOY?
Now just so we don’t have any confusion, Nintendo is listed on the Japan Stock Exchange under the symbols, 7974.T.
If you have a Saxo Trader Go Account like me, well you can buy directly off the Japanese stock exchange which is the right way to invest here.
But if you don’t have access to the Japanese Stock Market, you can still buy Nintendo through what is called an ADR.
So you might be able to purchase essentially Nintendo shares with the ticker symbol NTDOY.
NTDOY represents 1/8th of a 7974.T Nintendo share.
Honestly, it’s not a big deal which one you buy as they both are pretty liquid. It depends on what your brokerage account allows you to do.
I’d love to hear your thoughts on this investment as I think a lot of people will think Nintendo is a great investment and I am being far too conservative.
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