Dollar has fallen 10% lower than Nintendo projected
I wonder where the dollar will stop. Earnings may take up to a 7% haircut from projections (not all sales are US based so it wouldn't be the full 10%.) Nintendo is generally conservative so it's possible they still exceed projections and if so it won't be a huge surprise. They will also guide down because that's how they do. I'm prepared to buy on any significant weakness. Anyone have any INTELLIGENT analysis here. I'm in it for the long term and Nintendos price versus growth seems to be conservatively priced provided they continue to grow like crazy.
I would like to put a SHOUT OUT to the idiotic American bankers and home buyers who can't add or subtract and have tanked the greatest economy in the history of the world. Way to Go! It's all good, because Tropic isn't sellin...Tropic is buyin!
The more I look at the financials, the more I think that Nintendo is not in as much trouble with the weak dollar as many predict. Both softie and sony have had to cut the price of their console, but Nintendo can cut the price in Europe, still turn a profit, and elsewhere and just stand pat in the US. Their products are selling like crazy, so the currency problem can be overcome. The forecast of waning popularity do not seems on the mark to me because there is always another article on another demographic that has discovered the Wii, or another school that is using the DS as a teaching tool. So long as their products have new markets, they will remain popular. Also the end of the bush presidency will boost the dollar.
Here are the facts of the matter and they are undisputed. Nintendo is has the top selling machines in both handheld and console markets. The game sales as a percentage of Nintendo made are falling...this means that every developer now knows they MUST write for the Wii. The currencies will shake out or be hedged but Nintendo is the early winner for the next 3 years. It would take a catastrophic event to end this trend.
I guess what I'm saying, is from my knowledge, unless Nintendo is actually buying items from the US, a strong yen vs dollar does nothing for them. The Yen in the bank is worth exactly what it was before for items purchased in Japan.
One note of light however, I guesstimated based on quarterly reports that 40% of unit sales for Nintendo originate in the US. That's only partially true, that 40% guess is for all the Americas. I'm not sure how many units actually go to Canada or South America, but that reduces that number regardless.
One thing to consider, is that the weak dollar should hurt Nintendo and Sony equally for US exports. So when comparing the companies against each other it feels like a wash there. The XBox is harder to quantify. The weak dollar means manufacturing is getting more expensive for them since they import from Asia. However most of their sales are in the US so it's status quo there.
Lastly here's numbers from the last quarterly report.
I don't believe the yen vs the Euro or other world currencies has changed much. so their shouldn't be much of a premium in currency conversions there. The one possibility is if they actually import anything from the US in which case they'd be getting it at a discount. However my guess would be anything they import is dwarfed percentage wise in comparison to their exports.