Nintendo Stock Drops 20% and One Man Loses $300 Million [UPDATED]

Your crystal ball skill are pretty shit. Companies like Nintendo often have swings and roundabouts. Nvidia lost almost 30% five years ago and now they lead ATI and the GPU market is still kicking. PC gaming isn't dead either. Oh and 2012 won't be the end of the world, just in case you were worried.

You get your kicks being an egotistical windbag who knows nothing from nothing and rants about everything. You also started out talking about Guidos and you thought it was hilarious, remember that? Yeah, I do and nobody thought it was even remotely funny.

The only imminent collapse is that of your skull due to the lack of brain holding it up.

Aww man, you still hung up on my piss take on Guido's??? P.S I actually quite like Jersey Shore, (genuine). And my comments back then were really not meant to be taken seriously.

Companies do fluctuate in terms of market all the time, you can get vast swings all the time. Except when you factor in the current economic climate that the Videogame industry is part of. Nintendo may not specifically collapse, but the industry as a whole is on a collision course to destruction, unless it majorly revamps itself. Shutting down a few developers and binning IP's is merely an act of 'trimming the fat'. It does not cure root and systemic problems in the Industry such as failing business practices i.e. failing pricing structures, marketing, especially costs of games and the extremely top heavy profitability of the industry (i.e. reliance of a few mega IP's).

Also if you hadn't forgotten the core markets of Videogames, namely the US, UK and to a lesser extent Japan are all tanking. The UK market for VG has drastically decreased from where it was 7-8 years ago (there was a Eurogamer article on it a few months ago). And the US economy seems to be perma-stuck in recession despite the actions of the govt. Less disposable income, means less games sales. Doesn't take a genius to work this out.

2012 may not be the end of the world, but it could be 1984 all over again for the Videogame industry....  And I'm not the only one that shares this though. Jeff Gerstmann has already stated as much numerous times, on the 'dire situation' of the Industry as a whole. He sees much more layoffs and closures in the near future. (Not that I'm a Gerstmanite or take his word for gospel.)

P.P.S I'd also like to point out that NVidia's fall in shares was during a whole different time, when the US economy was growing on the back of deficit spending, and also that the GPU Hardware market is also very susceptible to each new model of GPU released. Fortunes of NVidia and ATI can change within 6 months just by releasing a new line or model. Nintendo's and the VG's situation is completely different. GPU manufacturers only make a fraction of their profits selling to enthusiast "core" gamers. Most of their profits come from low end consumer and business/professional use. Which is why even if tomorrow the VG industry were to collapse, NVidia and ATI would continue along and merely stop making high end GPU's.

Your whole post directed against me was nothing more than ad hominem attacks and baseless accusations, coming from personal dissatisfaction. If you truly believe this Industry is OK, I've got a bridge to sell you over the Pacific. It's called the "Too Big To Fail Bridge", it was created by Ben Bernanke for the bankers who couldn't possibly fail....  (That was sarcasm by the way.)

EDIT: The original post contained some derogatory statements to Guidos, which I decided to remove, because as much as SeriouslyNow seems to think otherwise, I actually have very little against Guidos and nothing against Italian-American communities in general. Stereotyping and attacking communities is stupid. That's not me in real life. I'm not a racist nor a xenophobe. I still stand by the rest of the above post.

@SeriouslyNow: While I am not arguing with anything that you have said but the position that Nintendo has cornered themselves within is very reminiscent of the Video game industry crash of the early 80's.    

Not only that,  but the current wider economic situation is much, much worse than it was in 1984. The world back then was slowly pulling itself out a temporary recession. The world today has been stuck in perma-recession with no immediate signs of any long term recovery. Not only is the Industry in bad shape, but the market it sells to is horrendous.

@Hailinel said:

@FourWude said:

The collapse is coming.... soon enough...

So you're looking forward to the collapse of a corporation and the loss of jobs?

I am. >:]

they can make it all back by releasing New Play Control pikmin 2 in the states....... c'mon Nintendo I know you're having a good time financialy right now but think about meeeeeee!

Ouch... I'm sure Nintendo will recover from this. I think it's rather hasty to speak about how the company is going to collapse and what not.

@SeriouslyNow said:

Your crystal ball skill are pretty shit. Companies like Nintendo often have swings and roundabouts. Nvidia lost almost 30% five years ago and now they lead ATI and the GPU market is still kicking. PC gaming isn't dead either. Oh and 2012 won't be the end of the world, just in case you were worried.

You get your kicks being an egotistical windbag who knows nothing from nothing and rants about everything. You also started out talking about Guidos and you thought it was hilarious, remember that? Yeah, I do and nobody thought it was even remotely funny.

The only imminent collapse is that of your skull due to the lack of brain holding it up.

For some reason that made me burst out laughing. Totally awesome reply, bro.

@WEGGLES said:

@dillinger:

http://moneycentral.msn.com/investor/charts/chartdl.aspx?symbol=NTDOY&CP=0&PT=11

They've been on a steady downward drop for a few years now. It'll take more than a bounce.

That was interesting to see. You can definatly see where the Wii made their stock skyrocket. Also interesting to note that their stock haven't been this low since 2006.

I wonder when this day will come for Apple. I thought the iPad would be their 3DS, but it turned out to be a huge success.

It's funny how in 08 and early 09 everyone was talking about how the VG industry was "recession proof" only to report 8.6% drop in 09 and 10% drop in 2010

Awwww, that so sad.

Was that sarcasm thick enough? Did it get through?

The casual support might drift away or collapse (at least in terms of console gaming), but that was always going to happen eventually anyway. Wii Bowling wasn't going to hold their attention forever. Nintendo should have been converting their MAYBEs into YESs, but I'm not sure if they've done that at all. They built on sand and they're still on sand. They built high though, and maybe they can repeat that trick, but it will be a lot harder this time.

The core isn't going anywhere anytime soon though; that's why they're called the core of the audience. Things will have to get much worse before they/we give up gaming in large numbers. The industry will need to adjust (and likely downsize) itself to that market, but that isn't necessarily a bad thing for those of us that remain, because we will become the main focus of the industry again.

The industry isn't going to collapse uniformly (if it does at all), and the side more likely to fall is the side I don't particularly care about.

Yes, yes...

Now is the time when they will be malleable.

Now is the time to strike.

It seems that Nintendo put their chips on their new audience of casual gamers, but the casual gamers are slipping out of the gaming fad a bit and moving on. Nintendo... come back to us geeks and nerds... we are forever.

"Gamers don’t just want beautiful graphics, sounds and epic stories."

But it sure as shit helps, don't it?

I should tone down the schadenfreude, but you know these guys have been doing lines off of asian racing queens for three years and its only justice that they join the rest of us on planet earth.

It's funny how in 08 and early 09 everyone was talking about how the VG industry was "recession proof" only to report 8.6% drop in 09 and 10% drop in 2010

@aceofspudz said:

"Gamers don’t just want beautiful graphics, sounds and epic stories."

But it sure as shit helps, don't it?

This.

This needs to happen, so Nintendo can wake the fuck up and become relevant again.

While I'm hopeful that NIntendo will pull another rabbit out of its big red hat, the situation is pretty dire. Considering only the stock price, as an indicator of investor's estimated future profit potential, Nintendo is back to the pre-Wii situation which, you may remember, was rather dire. The general consensus was that Nintendo's hardware (both the DS and the Wii) had to be a hit for Nintendo to remain healthy. Of course, both were huge hits and Nintendo's stock exploded (at the height of Wii hype, Nintendo stock was over ¥70.000 per share, almost six times the current value).

They're now back to the same position they were in in 2006, but instead of the DS and the Wii (Revolution at the time), they have the 3DS and Wii U to work with. Not only is the marketplace (and the global economy for that matter) different, but they're also competing against their former selves. Both the 3DS and Wii U invoke thoughts of their predecessors, through name, appearance and functionality. How are they going to convince DS owners who now just play shitty iPhone games that they should buy a 3DS? How are they going to convince Wii owners whose shiny little toy has been gathering dust for years that the Wii U will be different?

We've all been asking those questions ever since these new devices were announced and the stakes have been getting higher. Most gamers' answer is that Nintendo should make more and better games and people will start buying consoles and software. But that hasn't exactly worked for Nintendo for the past fifteen years or so. Perhaps partly because the games they do develop are less amazing and less original as time goes by. But more importantly, I think, because people demand something different from video games nowadays. Nintendo has been hopelessly out of touch, and I've been one of the schmucks defending their decision making because I don't care about online and I don't care about graphics and I don't care about shootan games. But the rest of the world does, and by sticking to their old ways, Nintendo has painted itself into a corner, or a niche, if you will. A niche that cannot sustain a console, let alone an entire company the size of Nintendo. Especially since Sony and Microsoft are also increasingly catering to that niche market.

So it turns out Nintendo hasn't been doing all that well for as long as most of us can remember. All the hype around Nintendo's success in recent years is based on two products. The DS has done very well over a long period of time, but the 3DS has a hard time getting near the same level of success. It may still manage (after all, the DS had a slow start too), but it's a harder sell and the 3DS has actual competition. The Wii has turned out to be a flash in the pan. It has made Nintendo a lot of money in the short run, but hasn't substantially changed the position they're in when looking at the long term.

The blue ocean, it turns out, doesn't hold many fish.

That is all. ;-P

Very good post. The scary part is that Nintendo on the whole is one of the best run and profitable companies in the VG Industry. It really doesn't bode well for others either.

This reality is also gonna smack Bobby Kotick in his face.

@shenstra said:

While I'm hopeful that NIntendo will pull another rabbit out of its big red hat, the situation is pretty dire. Considering only the stock price, as an indicator of investor's estimated future profit potential, Nintendo is back to the pre-Wii situation which, you may remember, was rather dire. The general consensus was that Nintendo's hardware (both the DS and the Wii) had to be a hit for Nintendo to remain healthy. Of course, both were huge hits and Nintendo's stock exploded (at the height of Wii hype, Nintendo stock was over ¥70.000 per share, almost six times the current value).

They're now back to the same position they were in in 2006, but instead of the DS and the Wii (Revolution at the time), they have the 3DS and Wii U to work with. Not only is the marketplace (and the global economy for that matter) different, but they're also competing against their former selves. Both the 3DS and Wii U invoke thoughts of their predecessors, through name, appearance and functionality. How are they going to convince DS owners who now just play shitty iPhone games that they should buy a 3DS? How are they going to convince Wii owners whose shiny little toy has been gathering dust for years that the Wii U will be different?

We've all been asking those questions ever since these new devices were announced and the stakes have been getting higher. Most gamers' answer is that Nintendo should make more and better games and people will start buying consoles and software. But that hasn't exactly worked for Nintendo for the past fifteen years or so. Perhaps partly because the games they do develop are less amazing and less original as time goes by. But more importantly, I think, because people demand something different from video games nowadays. Nintendo has been hopelessly out of touch, and I've been one of the schmucks defending their decision making because I don't care about online and I don't care about graphics and I don't care about shootan games. But the rest of the world does, and by sticking to their old ways, Nintendo has painted itself into a corner, or a niche, if you will. A niche that cannot sustain a console, let alone an entire company the size of Nintendo. Especially since Sony and Microsoft are also increasingly catering to that niche market.

So it turns out Nintendo hasn't been doing all that well for as long as most of us can remember. All the hype around Nintendo's success in recent years is based on two products. The DS has done very well over a long period of time, but the 3DS has a hard time getting near the same level of success. It may still manage (after all, the DS had a slow start too), but it's a harder sell and the 3DS has actual competition. The Wii has turned out to be a flash in the pan. It has made Nintendo a lot of money in the short run, but hasn't substantially changed the position they're in when looking at the long term.

The blue ocean, it turns out, doesn't hold many fish.

That is all. ;-P

You're right on all accounts, straight up. It is insane that their stock prices are at Gamecube-levels. They're betting on the same two horses that pulled them out of the rut in 06, but, since 06, those horses have gotten old and stale, and that's the whole reason they're back in the rut in the first place. I honestly don't see a bright future ahead for Nintendo.

I really hope they turn it around, but they've got a lot of work ahead of them, and frankly the odds don't look too good.

Nintendo almost died, plenty of times already.

At this point I believe they have some kind of "Plan C" for when shit starts to stink. They're building a rocket.

That's a lot of zeroes in there.

It seems that Nintendo put their chips on their new audience of casual gamers, but the casual gamers are slipping out of the gaming fad a bit and moving on. Nintendo... come back to us geeks and nerds... we are forever.

Also, that dude could totally rent out the Staples Center for like 2/3 of a night.

Surprised nobody jumped on that one.

Am I the only one seeing parallels to the Virtual Boy here?

The problem with the casual market is that it is not a sustainable market for their (Nintendo) products. Unlike say Apple which has developed an incredible model of repackaging the same good with minor upgrades and tweaks to resell to the same consumers, you just can't do that with a console. The console business has always been about software really and Nintendo to a large extent have tried to manage without that, with peripherals and the like. At this stage I think the market is starting to show it won't support a model like this, especially a consumer tendencies shift to other portable devices for their gaming fix.
 
It should be noted that since the news was reported the shares have gone back up 9% which is a pretty volatile shift overall, so the drop is actually 12% (which is still significant). Hopefully this leads to Nintendo reevaluating their current approach to hardware and peripherals, hopefully with a return to more software.

It's just one bad quarter... I'm sure they will live, especially considering the new price drop.

it is a little shocking that the price fell so quickly. the 3DS didnt even have 1 Christmas with the 249 price mark. the bigger question is what is this going to do to the Vita? i mean if Nintendo cant sell its hand held i would guess Sony is in some big trouble.

Or maybe, just maybe.... I'm just stating that there is an imminent collapse of the videogame industry. Something which I've posted on numerous times, to the point which I find it tedious to even talk about it.

Am I the only one seeing parallels to the Virtual Boy here?

Nintendo will bounce back as holidays approach. And Yamauchi will hang on to his stock whose value will eventually rise again. This isn't really news.

Of course Wii sales dropped, that's because everyone and their grandma (and not just figuratively) already has one. And the DS had just as much of a sluggish start as the 3DS, hell the only games I had there for like a year and a half were fucking Feel the Magic, Lost in Blue and Mario 64 DS.

Casual gamers are loyal only to themselves, and maybe aren't even that... :)

I'm not sure what 3DS has to do with the casual market considering it doesn't target the casual market at all. It just doesn't have games.

Damn, son.

@patrickklepek The drop doesn't represent a loss in confidence in Nintendo. It represents a loss in value. The net present value of the firm / shares outstanding = share price. Change your projected value of future earnings (yesterdays 82% drop) and you change the value of of the firm by the exact same amount. So the 82% drop in earnings is likely a 21% drop in net worth.
 
Also, first paragraph after the quotes you left out the word "to". It should read the man who used to run Nintendo.

Sweet shit, maybe I'll buy some stocks and become fucking rich when the next Wii Sports comes out.

The market is driven by panic-driven dismay and anxiety.  It doesn't like to hear a company is lowering prices only raising them no matter what the consumer response.  When Netflix announced their new pricing plans a few weeks ago, the Netflix stock jump 50 points.   That fact that it was followed by consumer outrage isn't something they cared to predict.  The turn of Nintendo is similar.  This readjustment might bring higher penetration for the 3DS, but no one wants to hear that now.  Time to run away and dump the stock like all the other frantic lemmings.

That's a bunch of money

21%?! Damn....

that's some hard hitting news patrick!

I really enjoy patrick's writing =D. Honestly I'm not surprised with their lack of new and original games coming out lately on Wii and really nothing that exciting for Wii U shown yet.

@atomic_dumpling said:

Am I the only one seeing parallels to the Virtual Boy here?

Are the parallels in 3D?

Starting to see the ripple effect of the price drop. I wonder what affect it will have on the perception of the WiiU and the Vita down the line.