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Nintendo

Nintendo. Basic Information. Company Name: Nintendo Co. Ltd Ticker: NTDOY Current Price: $ 15.74 52 Week Range: $13.00 - $20.25 Market CAP: $ 16.1B P/E Ratio: 22.5 EPS: Q3 (Tuesday) -0.2 Q4 (January) 0.22 Target Price: $35.00 . Why Nintendo?.

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Nintendo

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  1. Nintendo

  2. Basic Information Company Name: Nintendo Co. Ltd Ticker: NTDOY Current Price: $15.74 52 Week Range: $13.00 - $20.25 Market CAP: $16.1B P/E Ratio: 22.5 EPS: Q3 (Tuesday) -0.2 Q4 (January) 0.22 Target Price: $35.00

  3. Why Nintendo? Once the market leader in console sales and games publishing Retreated from the US market somewhat because of Sony and Microsoft Wii approached gaming from an entirely new direction • Threatened the accepted paradigm of console gaming • The games are less sophisticated but their simplicity has broadened the audiencefor video games • Substantially expanding the industry and the company's growth • Female and older gamers took up the Wii • Billions of dollars of intellectual property • But now also offers games like FIFA, COD, Assasins Creed, Madden etc. • More than 95 million units of the Wii have been sold • 30 million units more than either Xbox 360 or PS3. We expect the WiiU to have a similar impact

  4. The Industry Video Game in the US Video Game Software Industry Risk Analysis The Major Players: Microsoft – X-Box Sony – PlayStation GameStop – Games and Consoles

  5. Competition • No major console releases since 2006 • The industry has been dependent on add-ons and accessories to retain consumer interest • Nintendo will be the first of the three major players to release their console. • Nintendo is tryingto cut into GameStop’s market share by eliminating the used games market • Casual gaming: Zynga declined 75.79% over the past year • X-BOX - 2001 • X-BOX 360 - 2005 • PS3 - 2006 • Wii - 2006

  6. Strengths • - Established brand • - Global company • - Well known household name • - Very loyal customers (cult following!) • - Lots of strong IP (Mario, Zelda, software IP) • Weakness • - Supply chain worries - global supply chain mgmt • - Currency fluctuations • - Slim profit margin on consoles • - Cost pressures from R&D and marketing • Threats • - Uncertainty in entertainment industry • - Big competitors (Microsoft, Sony) • - Emergence of low-cost games for mobile devices - Apple App Store or Google Android Market • Opportunity • - Large market (opened up younger and older segments) • - WiiTV: parternered with Hulu, Netflix, and Amazon • - New releases: FIFA, COD, Maddenetc. • - Old releases: Mario, Super Smash Bros, Dance

  7. Ratio Analysis: DuPont Model

  8. Financial Analysis

  9. 10 Year Price Chart Console becomes obsolete Wii Introduced We are here

  10. 1Year Price Chart Concerns over Wii U "Power“

  11. Our Recommendation BUY • Earnings report: Tuesday • Wait until we see how Q3 earnings goes • Buy Thursday or Friday • Product Launch: November 18th • How much: 5% ($70,000) • Hold for a year

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