Analysis of Nintendo share price for trading

Are you planning to trade on the stock markets using CFDs, and more particularly invest in new technologies such as video games companies? In this case Nintendo shares are an obvious choice for you. Here we offer you the opportunity to place the odds in your favour by reading various information about this company in this article that can assist you such as a historical technical analysis of its share price, details on the group’s activities and an economical and financial history as well as, of course, some general financial data about this share price.  

75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

 

About the Nintendo Group:

The Nintendo Company is a multi-national business that was created in 1989 in Japan by Fusajiro Yamauchi and therefore its head office is in Tokyo.

During the first few years of its activity, Nintendo was specialised in Japanese card games called Hanafuda. It was only in the beginning of the 1970s that the company branched out into other types of products such as games and video arcade games machines. In this manner the Nintendo Company became one of the precursors of video games.

Just before the beginning of the 1980s Nintendo launched into the games console market. Nowadays the company is one of the leaders of this activity sector. In 2008 the group held the number one position as the leading Video games publisher in Japan and held second position in the United States (NPD Group). In 2014 Nintendo sold 680 million consoles and 4.3 billion games videos throughout the world.

Nintendo also succeeded in introducing some of its games such as Mario and Pokeman into popular culture, a rare achievement that can only be claimed by a few large groups such as Disney.

 

Nintendo main competitors:

The Japanese company Nintendo is one of the biggest brands in the world in the video games industry. But even if it was the leader in this market a few years ago, the company is now competing with numerous other companies. In fact, Nintendo currently ranks 11th in the world in this sector in terms of turnover.

It is thus outperformed by Tencent, Microsoft, Sony, Activision Blizzard, Apple, Electronics Arts, Google, NetEase, Warner Bros and King.

However, it is positioned ahead of other competitors such as Nexon, Mixi, Take-Two, GungHo, Square Enix, Disney, Ubisoft, Konami, DeNa, Facebook, Zynga, Sega, NCsoft and Bandai Namco.

You should imperatively integrate the data of the company’s competitors in your fundamental analyses of this sector which is in perpetual evolution. To do this, you can monitor the news and the results of the major video games companies through your broker or by subscribing to specific news feeds.

 

Nintendo main partners

In 2015, Nintendo joined ventures with the Japanese mobile platform DeNa in order to create and develop video games for Smartphones and tablets thanks to the intellectual properties of Nintendo.

Always in 2015, Nintendo joint ventures with Google’s Youtube channel in order to launch its Nintendo Creators program, an affiliate program that allows youtubers to make money from their videos featuring games from the brand.

In 2016, Nintendo signed a partnership agreement with Nvidia in order to equip its latest game console, Nintendo Switch with the graphic solutions developed by the latter. This collaboration should last at least 20 years.

In 2017, Nintendo and its competitor Ubisoft worked together on the video game Mario+ Raving Rabbids as part of a marketing partnership.

 

Important stock market information about Nintendo shares:

Here are a few key figures and some important general stock market information about the Nintendo Company that will assist you in better ascertaining its position on the international stock markets.

  • In 2017 the total stock market capital of the Nintendo Company achieved U.S. $121,495.47 million.
  • The number of shares issued by the Nintendo Company and currently in circulation on the stock markets is around 141,637,000.
  • The Nintendo Company share price is currently quoted on the Nasdaq Global Select Market of the Nasdaq All Markets stock market in the United States.
  • The Nintendo Company share price is included in the composition of the Nikkei 225 stock market index and is therefore one of the top 225 Japanese companies in terms of stock market capital.
  • Shareholdings in the Nintendo Company are currently as follows: 17.1% held by The Capital Group Companies, 15.2% of the company’s shares are held in reserve and 4.15% held by the Bank of Kyoto. The rest of the assets are held by numerous individual and institutional investors throughout the world.

 

Historical technical analysis of the Nintendo share price:

It can be interesting to look at the historical rate of the Nintendo share price over the last ten years. In fact, the stock market charts provide numerous indicators as to how this asset reacts and its volatility over different periods.

We can thereby observe strong and clear medium and long trends whereas micro-movements are less volatile and generally shorter, reacting well to the more basic technical indicators.

At the end of 2007 the share price experienced a strong rising trend that brought it to €424.50 in November. During and after the financial crisis we observe a progressive fall in the price punctuated by slight rising recoveries such as that in January 2008. However, the trend remained strongly negative and led to a drop to €166.10 in December 2009.

The price of Nintendo shares then returned upwards in a sharp rising movement that enabled it to again reach a level of €261.50 in March 2010. But this respite did not last long as a new falling trend appeared and even accelerated in February 2011 until it reached the lowest price of €102 in August 2011.

The psychological threshold of €100 could not stop this falling trend that continued in a more stable but progressive manner until February 2013 with its lowest price of that period at €68.12.

The followed a fairly stable period until February 2015 when the asset experienced a second wind with the return of an increase in its share price: An initial rise led this share price to a level of €172.85, which was immediately followed by a slight corrective drop to €121.15 in January 2016.  

The rise became more clearly marked in June and July 2016 with a spectacular jump to €238 in only one month. The beginning of 2017 was also marked by a strong progression in the rise of this share price and it is rapidly closing on the €300 bar.

 

Economical and financial history of the Nintendo Company:

To enable you to better understand what influenced the Nintendo share price during these latter years we offer you the opportunity here to delve with us into a fundamental analysis of this asset with a summary of the events that have marked the financial and economical history of this company over the last decade.  

  • In 2007 Nintendo sold over 6 million Wii consoles throughout the world and forecast sales of over 14 million before the end of 2008. That year the group launched the Super Mario Galaxy game in 3D which was named Game of the Year and Game of the Decade.  
  • In 2008 Nintendo brought out the Super Smash Bros Brawl game that sold 9.2 million units and launched the Nintendo DSi in Japan.  
  • In 2009 the DSi made its appearance on the American and European markets. The group launched the New Super Mario Bros Wii game which became the fastest selling game sold worldwide. Nintendo also launched the DSi XL in Japan which arrived in Europe and the United States in 2010.
  • In 2010 Nintendo revealed its new mobile console at the E3, the Nintendo 3DS that flooded the international market in 2011.
  • In 2012 Nintendo announced the introduction onto the market of the Nintendo 3DS XL which was also released simultaneously onto the Japanese and European markets and then a little later onto the American market. Still in 2012, Nintendo launched the Wii U lounge console with online connectivity developed and associated with the Miiverse network.
  • In 2013, Nintendo presented the Nintendo 2DS that was compatible with the DS and 3DS games and less expensive than the previous mobile consoles. It was placed on sale that same year.
  • In the beginning of 2014, the accounts and key figures of Nintendo were revealed with disappointing sales figures for the Wii U and negative forecasts for the coming years. The group still launched its Amiibo figurine range, compatible with the Wii U and Nintendo 3DS consoles. These were placed on sale in November of the same year at the launch of the new Super Smash Bros game for Wii U. Still in 2014, Nintendo launched the new Nintendo 3DS which boasted a small analogical stock.  This would be placed on sale in Japan in 2014 before launching in the European market followed by North America in 2015.
  • In 2015 the Wii U finally enjoyed a great success and sold over 9.2 million models with 50 million units sold for the Nintendo 3DS. Nintendo then announced a collaboration with DeNA for the development of games and applications for smartphones and tablets and the launch of a new console named the NX. Still in 2015, the CEO of Nintendo passed away and the group organised a council with the objective of electing the successor, Tatsumi Kimishima was officially named as the new CEO. Then followed an internal reorganisation of the company including the merger of several similar structures and the creation of a Business Development department. At the end of an extremely busy 2015 Nintendo announced the launch of a new loyalty programme, My Nintendo, that would replace Club Nintendo, together with an initial application for mobile phones called Miitomo. This application passed one million downloads within three days after its launch which boosted the Nintendo share price on the Tokyo stock exchange.
  • In 2016 the Nintendo Group announced a major series of redundancies and published its financial results with a positive outlook but with over 60% reduced profits in a year. The same year Nintendo launched the Nintendo Switch to replace the previous ‘NX’ model. This innovative hybrid console boasted the possibility to adapt from a lounge console to a mobile without the necessity of stopping the game and a system of detachable handles enabled numerous game possibilities. It was launched onto the market in the same year with a dozen of the most popular Nintendo games.
  • In 2017 Nintendo announced the launch of the New Nintendo 2DS XL compatible with preceding game versions which offers a larger screen and less weight. It was announced that it would be available in July 2017.

 

The advantages and strong points of the Nintendo share price as a stock market asset:

To trade on the Nintendo share price over the long term you must first be sure of the strengths of this company and its ability to maintain and boost its growth over the coming years. Here therefore is a summary of the strong points of this group that will assist you in assessing its abilities clearly.

Firstly, we can underline as a strong point the general high quality of the distribution strategy of the Nintendo Group. In fact, Nintendo manages a large distribution network that includes wholesalers and retailers. The group also possesses its own network of boutiques and distributes its products through high end retailers. Of course, Nintendo is also present on online sales networks and sells its products through numerous websites such as Amazon.

The pricing policy implemented by the Nintendo Group is another of its strengths. In fact, the group sells its products initially at a high cost then lowers its prices progressively to match those of its competitors. This policy, generally known as the ‘skim strategy’ is one of the foundations for the brand’s success.   

Still from a strategic point of view, we also note the marketing methods of this group that have managed to create a real ‘need’ in its consumers although the games it develops and sells are not exactly essential items. This success is achieved through a well honed marketing and communications strategy. 

The Nintendo Group also reassures its investors by supplying information on its long term prospects which is not the case with its principal competitors which only tend to look at the short term projections. Due to this fact, Nintendo heavily invests in research for its products to obtain high customer satisfaction and also concurrently favours superior customer relations.

In 1959 the Nintendo Group also concluded a partnership agreement with the Disney Group. This strategic agreement had the objective of appealing to a new clientele, children. This partnership in fact enabled Nintendo to use certain Disney characters on the company’s products thereby increasing the popularity of the brand and penetrating the household sector.  

To conclude, the Nintendo company benefits from a reputable brand image as a company that cares about its employees particularly in terms of salaries that are generally higher than its competitors.

 

The disadvantages and weak points of the Nintendo share price as a stock market asset:

As we have just noted, Nintendo possesses numerous advantages that should enable the company to maintain its reputation with investors and thereby increase its stock market share price over the coming years. However, before taking position we highly recommend you also take into account the weak points of this company and its principal disadvantages that we shall now elucidate.     

Firstly, the Nintendo Group is currently suffering the consequences of recent problems with its Wii games console which is, as you may remember, one of its most popular products at present. These problems have led to a major recall of this product and therefore generated losses. Also, still concerning the Wii console, Nintendo has not been successful in counteracting the sale of low price and inferior quality imitations of its products which has also weakened its brand image. Due to this problem the group has lost numerous clients, previously loyal, that have turned to its competitors. It is clear that it will take some time to resolve this situation.   

Analysts of this asset also deplore the apparent inability of the Nintendo Group to respect its margins. In fact, the sale of video games is an activity that generates weak margins and therefore requires a major sales volume to be profitable. Due to the high competitiveness in this sector the market is becoming progressively more fragmented and the Nintendo Group has increasing trouble in achieving its margin objectives.

Finally, still relating to the profitability of the Nintendo Group and its appeal for investors, we would mention the significant cost of its promotions. In fact, the group regularly launches new products that require major expenditure. Also, apart from these launches the group relies on a marketing strategy that integrates free gifts and other promotional offers that weigh heavily on its budget dedicated to promotion thereby negatively influencing profitability for the group over the short term.

You now have information on all the elements you need to follow to understand how the Nintendo activities may progress and thereby anticipate future variations in this company’s share price on the stock market.

 

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75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.