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Nintendo Co. Ltd. Message Board

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  • ywc2 ywc2 Sep 29, 2008 2:52 AM Flag

    Reason for Wii shortage

    If I remember correctly, Sony dropped price of PS2 from $299 to $199 after about two years and Wii is still at $249. Nintendo is making more Wii now than Sony ever did with PS2 and you are complaining about 1 billion in sales Nintendo may or may not have made last year? Of course it would’ve been great to get that extra 1 billion in sales, but that would’ve meant capital spending to increase production and lower margins. With economy slowing down, Nintendo may have too much inventory by now and forced to cut prices on Wii or even worse lose money on Wii. Currently, only US is experiencing shortages and even that may disappear after this holiday season with current production number. What if Wii is just a fad and nobody wants to buy them next year would you prefer explosive growth for two years and crash and burn or steady growth for years to come? Take a look at all the banks now. They were making big bucks few years ago betting housing prices will go up forever, but the party ended and now nobody is around to clean it up.

    Yes, I agree $45,000 is a lot of money to invest into just one stock for us mortals, but that’s about price of a nice car and I see a lot of people driving car that costs more than that. If you want to invest $45,000 on a stock, you are not going to just jump in and out for quick profit. Nintendo wants that stability. They don’t want to chase some hot trend and burn money. They want long term growth. If they split their stock it will likely attract those kinds of investor who wants quick growth and even quicker profit. There are a lot of stocks that trade below $5 and then there is Berkshire Hathaway (brk-a) which trades $135,000 a share. Berkshire used to trade $45,000, but that didn’t stop people from buying them. If company is doing well and shares are reasonably priced, no matter what the stock price is people will buy it.

    I am not going to pretend I know what will happen to NTDOY or stock market because I don’t know and nobody does. All I know is that conservative company like Nintendo won’t be likely to get into trouble like all the banks are in now and will likely be around for a long time. They employ some of the most creative people in Japan and have been successful by being different. I think they will be successful for number of years to come. Just try to buy it when it’s cheap and collect the dividends. In few years, who know what they will come up with next?

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