Posted by: seanmalstrom | October 21, 2016

Stock buyers are not soothesayers

During the Golden Days of the Wii, I was contacted by a Nintendo investor. He told me interesting things. One of them was that ‘the Nintendo investors are stupid’. We can see this in the Investors Q/A where they ask ridiculous and stupid questions. If you want more proof, look at how these investors went nuts over Pokemon Go and bought Nintendo stock without realizing who actually made Pokemon Go and how Nintendo’s profit from it was going to be limited.

What is an investor? An investor is someone who makes his money work for him. To the masses in the working class, we spend our time and labor to make money. But investors use their money to work.

We read this story from the Wall Street Journal saying that there is a 5% drop in Nintendo stock upon the unveiling of the Switch. First of all, this is not much and is largely irrelevant. Why WSJ made a story out of it is odd. But there is little to no correlation of Nintendo stock investors to future Nintendo success.

What the WSJ needs to be keep its eye on, and so does you, the beautiful reader (all my readers are beautiful), is the Nintendo cashflow. If I am right, I suspect Switch will offer more than just cashflow from software. What if you could take Switch to theme parks and other environments? What if deals are made to bring your Switch in there? Remember in the past how Miyamoto spent time (and his time is highly valuable) making it so you could go to a museum with your DS and download software allowing you to interact with that museum’s exhibits? You see people walk around with smartphones and tablets, but there isn’t much interaction. Nintendo is very good at interaction. There is more to come.

Ignore the stock investors. They are, and always have been, the laggards.

Ignore the hardcore gamers too. Hardcore gamers are the last ones to realize that gaming is changing. I still know Atari gamers who were so hardcore, they still write off the NES and the D-pad as they stay in their wood paneled places playing ‘real consoles’ like the Atari 7800. It was children, not hardcore gamers, that made the NES a revolution.

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