Group 1 - The core investment thesis for Nintendo is centered around the launch of its new console, which is anticipated to take place in late 2024 and early 2025 [1] Group 2 - The article does not provide specific financial data or performance metrics related to Nintendo or the gaming industry [1]

Nintendo (NTDOY 3.36%) stock has gone on quite a run in the last few months. Even with a recent drop in price due to tariff concerns, the stock is up 30% in the last six months in anticipation of the upcoming release of the Nintendo Switch 2. This hardware upgrade -- which has been in the works for years now -- should lead to massive earnings growth for the video game giant over the next few years.I still believe the market is underrating the potential earnings bump from the Switch 2. Here's why investors s ...

The entertainment giant is entering its new era starting next month.Legacy media has had a rough time in the last decade. Stalwarts such as Walt Disney have struggled mightily versus modern technology competitors, with its stock only posting a 13% total return in the past 10 years. Nintendo (NTDOY -5.82%) is one of the few legacy entertainment companies that is thriving. The Japanese video game maker and burgeoning entertainment giant has delivered a 739% total return in the last 10 years and recently broke ...

Core Viewpoint - Nintendo's stock is experiencing a decline due to investor concerns over potential tariffs impacting the launch of its new Switch 2 console [1][2][4] Group 1: Stock Performance - Nintendo's share price fell by 6.7% during trading, with a peak decline of 7.6% earlier in the session [1] - Despite the recent pullback, Nintendo's stock is still up 19% year to date, driven by excitement surrounding the Switch 2 [2] Group 2: Switch 2 Launch - Nintendo is set to fully unveil the Switch 2 console on April 2, where details about the launch window, pricing, and game lineup are expected to be shared [3] - The introduction of new tariffs could significantly affect the pricing of the Switch 2, potentially impacting its sales performance [3][4] Group 3: Tariff Implications - If the Switch 2 faces substantial new import tariffs, Nintendo may pass some or all of the increased costs to consumers, leading to a higher retail price [4] - A significant increase in the Switch 2's price due to tariffs could make it less attractive to consumers [4]

Core Viewpoint - Nintendo's stock has surged 25% in 2025, driven by optimism surrounding the upcoming Switch 2 launch, which is expected to support games from the original Switch and is anticipated to be released in 2025 [1][3]. Sales Expectations - The recent stock gains reflect high expectations for sales, with the stock trading at a multiple of sales typically reserved for the fastest-growing video game stocks [2]. - Nintendo's guidance indicates a 29% year-over-year decline in sales for the fiscal year ending March 2025, leading to expectations that Switch 2 will revive demand and grow sales [5]. Product Details - Limited details have been provided about the Switch 2, but it is confirmed to support original Switch games, and Nvidia is expected to supply an updated Tegra processor, potentially enabling newer games like Grand Theft Auto VI [3][4]. Valuation Concerns - The stock is trading at over 10 times trailing sales, which is considered expensive compared to other gaming stocks, such as Roblox, which has a price-to-sales multiple of 12 despite posting 32% revenue growth [6]. - Nintendo's forward price-to-earnings (P/E) ratio stands at 34, which is high for a company reliant on a cyclical console market [7]. Revenue Growth Challenges - Nintendo needs to sell more hardware units, which typically generate low profit margins, to drive revenue growth, while leading video game software companies have smoother sales histories and lower valuations [8]. - Analysts expect Nintendo's annual revenue to fall from a peak of $16 billion in fiscal 2021 to $8 billion in the current fiscal year [9]. Investment Outlook - Given the uncertainty surrounding Switch 2 sales, it may not be advisable to buy the stock at new highs, as disappointing sales could lead to a significant stock price drop due to its rich valuation [10].

Core Viewpoint - Nintendo is positioned for significant growth with three major catalysts expected to impact its performance over the next 14 months, despite recent financial challenges [1][2]. Group 1: Movie Collaborations - The release of "The Super Mario Bros. Movie" in fiscal 2024 has positively influenced Nintendo's stock, which has risen 23% in 2025, despite a decline in revenue for three of the last four years [3][4]. - The film achieved over $1 billion in worldwide ticket sales, ranking as one of the top two movies of 2023, alongside "Barbie" [4]. - A sequel, "The Super Mario Bros. 2," is set to release in April next year, which is expected to further enhance merchandising and licensing opportunities for Nintendo [5]. Group 2: Theme Park Expansions - Nintendo has partnered with Comcast to develop Super Mario-themed areas in Universal Studios parks, with significant expansions already in Japan and California, and a larger project opening soon in Florida [7][8]. - The new Epic Universe theme park in Florida will feature multiple attractions, expected to drive high foot traffic and revenue through licensing and merchandise sales [9][10]. Group 3: Gaming Console Developments - Nintendo has not released a new console since the Switch in 2017, but plans to launch the Nintendo Switch 2 later this year, which is anticipated to revitalize sales and profitability [11][13]. - The cyclical nature of gaming consoles suggests that initial hardware sales will be followed by a peak in revenue from software titles, indicating a positive financial outlook for Nintendo in the coming years [14]. - Nintendo maintains a strong financial position with a market cap of $84 billion and an enterprise value of $70 billion, suggesting potential for increased dividends and stock performance as profitability improves [15].

Core Viewpoint - Nintendo has revised its annual net profit forecast downward due to a significant decline in sales of its Switch console in the first three quarters of the fiscal year [1][2][3]. Financial Performance - The company has lowered its full-year net profit forecast to 270 billion yen ($1.7 billion) from 300 billion yen [2]. - Over the nine-month period, net profit dropped 42 percent to 237 billion yen, while sales tumbled 31 percent to 956 billion yen [3]. Sales Forecast Adjustments - Nintendo has reduced its Switch hardware sales forecast to 11 million units from 12.5 million units [4]. - The decline in sales is attributed to lower performance compared to the previous fiscal year, which was boosted by popular titles such as "The Legend of Zelda: Tears of the Kingdom" and "Super Mario Bros. Wonder" [4]. Future Product Plans - Nintendo plans to release the successor to the Switch, referred to as Switch 2, in 2025, with more details expected to be revealed in early April [2][5]. - The new console is anticipated to be larger but will maintain a design similar to the original Switch [5]. Market Insights - Analysts suggest that Nintendo was overly optimistic regarding Switch 1 sales when setting the current fiscal year's hardware sales forecast [6]. - The success of the Switch 2 is deemed crucial, as Nintendo has transitioned into a single-platform company without a backup plan in case of failure [6][7].

Core Insights - Nintendo's financial results for the third fiscal quarter ended December 31 show a significant decline in hardware sales, with Switch sales down 30.1% year-on-year, totaling 4.82 million units sold [1] - The overall sales for the nine months ended December 31 reached 9.54 million units, reflecting a 30.6% decrease compared to the previous year [1][4] - The company is facing a potential decline in sales as it has announced the upcoming Switch 2 console, leading to expectations of continued decreases in current Switch sales [1] Hardware Sales - For the nine months ended December 31, 2024, Nintendo sold 9.54 million Switch hybrid consoles, down 30.6% from the previous year [1][4] - The sales breakdown includes 3.40 million units of the standard Switch, 8.17 million units of the OLED model (down 37.9%), and 2.18 million units of the Switch Lite (down 20.5%) [5] - The total hardware sales for the fiscal year were 13.74 million units, reflecting a 30.6% decline [5] Software Sales - Software sales totaled 123.98 million units for the nine months, down 24.4% year-on-year [4][5] - Notable title sales include The Legend of Zelda: Echoes of Wisdom at 3.91 million units and Super Mario Party Jamboree at 6.17 million units [2][3] - Cumulative sales for Mario Kart 8 Deluxe reached 67.35 million units, contributing to a total of 19 million-seller titles during this period [3][4] Digital and Mobile Sales - Digital sales for the dedicated video game platform amounted to 245.8 billion yen, down 29.0% year-on-year, primarily due to decreased sales of downloadable versions of packaged software [7] - In the mobile and IP-related business, sales reached 49.7 billion yen, down 33.9% year-on-year, attributed to reduced revenue from The Super Mario Bros. Movie [8] Financial Overview - Overall sales for the period reached 956.2 billion yen, with international sales accounting for 76.5% of the total at 731.5 billion yen [9] - Operating profit was reported at 247.5 billion yen, with ordinary profit at 327.1 billion yen and profit attributable to owners of the parent at 237.1 billion yen [9] Future Outlook - Despite the decline in hardware and software sales, Nintendo plans to continue releasing new titles to maintain consumer engagement with the Switch platform [10][11] - The company has revised its financial forecast based on sales trends and exchange rate evaluations, adjusting its sales expectations for the fiscal year [12] - The Nintendo Switch, which debuted in 2017, has generated over 129 million current players and is approaching 150 million units sold [13]

Core Insights - Nintendo reported weaker-than-expected financial results for its fiscal third quarter, leading to a reduction in its sales forecast for the Switch console ahead of the anticipated release of its successor, the Switch 2 [1][3][4] - The company has been trying to maintain interest in the aging Switch console through key game releases featuring popular characters like Super Mario and Zelda, but interest is declining as the console approaches its eighth year [1][3] Financial Performance - Revenue for the fiscal third quarter was 432.92 billion Japanese yen (approximately $2.8 billion), falling short of the expected 498.22 billion yen [4] - Net profit for the same period was 128.53 billion yen, compared to the expected 136.16 billion yen [4] Product Development - Nintendo teased the Switch 2 in a recent trailer, indicating that some existing Switch games will be compatible with the new console, although no price or release date has been announced yet [2][3]

Investment Strategy - The investment approach focuses on long-term wealth building through compounding, with a preference for holding investments for 10 years or longer [1] - Key strategies include reinvesting growing dividends, balancing current income with sustainable growth, and seeking opportunities with a substantial margin of safety and wide moat [1] - The strategy emphasizes buying great assets at fair prices during periods of short-term market fear [1] Asset Allocation - Dividend growth stocks are typically held in taxable brokerage accounts [1] - REITs and BDC investments are allocated within Roth IRAs [1] Industry Focus - The investment universe spans multiple industries including Media, Marketing, Public Relations, Travel, Tourism, Hospitality, Corporate Events, and Software as a Service [1] Investment Preferences - The portfolio has shown success with REITs and dividend growth stocks, combining fundamental analysis with reasonable expectations of future cash flows [1] - While occasional short-term opportunities in undervalued assets or special situations are considered, the primary focus remains on long-term investments [1] Experience and Track Record - The investment manager has 15 years of experience managing personal and family assets with the goal of building multi-generational wealth [1]