The adverse market reaction to Nintendo's Wii U announcement has continued into a second day, with its shares falling a further 5.2 per cent in Japan.
Nintendo's stock slid 5.7 per cent yesterday as traders reacted to president Satoru Iwata unveiling the console but declining to reveal a price, release date or software line-up. One analyst said: "There really wasn't anything more than what's already [been] reported."
However, Mitsushige Akino, of Ichiyoshi Investment Management, today gives a different perspective on Nintendo's falling stock. "The product itself is not bad - market expectations have been far too high," he told The Wall Street Journal.
"It is also a reflection of structural issues caused by a transformation within the market," he added, a reference to the casual users that drove the Wii's stunning success, who are now catered for by smartphone and browser-based games.
The continuing lack of investor confidence in Nintendo is all the more surprising given that the reaction to the Wii U announcement, and the 3DS software line-up, from within the industry itself has been broadly positive. Speaking to us yesterday, Wedbush Securities analyst Michael Pachter admitted his surprise at Nintendo's stock plummeting to its lowest level in half a decade.
"The Japanese market listens to Japanese analysts, not to us," he explained. "We have a difference of opinion, and I cannot reconcile my Japanese competitors' negative views on Wii U with my positive views.
"On 3DS, the software is compelling; perhaps there is concern over PlayStation Vita's price, as many will undoubtedly prefer Vita over 3DS. I really think Nintendo killed it at this show, and am as confused by the stock reaction (and Japanese analysts' bearish views) as you are."
Announced at Nintendo's E3 press conference on Tuesday, the Wii U controller features a 6.2 inch touchscreen. Play can be paused on a TV, and resumed on the controller itself. While no games were announced on stage, Shigeru Miyamoto has since confirmed that Pikmin 3 is at an advanced stage of development for the new console, which is set for release next year.
Source: Wall Street Journal
Comments
4Pachter's confused by shiny objects, and has still to discover the secret of fire. Rumours he's learned to walk erect are as yet unfounded.
Granted Michael Pachter does sometimes come out with some less-than-sane sounding things, but he seemed cogent on his recent Bombcast appearance.
I think confusion at the dropping in stock price here is understandable. Other than the general sense of 'this looks different and therefore not safe' which investors might legitimately be feeling I can only think the downturn is likely to be short-lived. As more games are announced, third parties signed, and the industry as a whole takes the temperature of the feeling around Wii U, I'd expect it to pick back up.
(This is not to be taken as a stock tip.)
Couldn't have said it better myself. He's a man who doesn't deserve to be printed.
Day 1: Reveal a last gen console without a release date, price, and most astoundingly of all: no first party game announcements, just tech demo's & footage from competing consoles. Don't mention Wii U online store, play, or services at all. Mention 3rd party publishers supporting Wii U with many Japasnese publishers and the biggest American publisher absent.
Day 2: The shock of day one starts to settle in, plus there is now the very stunning news that you can't use more than 1 new controller at once.
HOW ON EARTH CAN PACHTER CLAIM TO BE SURPRISED BY ANALYSTS AND INVESTORS REACTIONS? HE'S NOT MEANT TO BE THINKING LIKE A FANBOY.