Gaming Nintendo stock rock Thursday 17 May 2007
About a year ago I first heard the buzz about the new Nintendo Wii, a game console which for once doesn't focus on better graphics but on an innovative controller. From reading gamers' reactions, I concluded this was going to be a hit and would beat the new Sony Playstation 3.

Then in August I read that market analysts were predicting the exact opposite, and I decided to buy Nintendo stock. Stock prices always reflect expectations, and if expectations for the Wii were low, there was profit to be made.
So in September, still two months before the Wii's release, I got an account with online stock broker Keytrade (which took a while) and put an order on Wii stock for 160 euro/share, a bit lower than the price at the time. It took a few weeks before fluctuations brought the stock price below 160 euro, and then I discovered that Keytrade was connected to the wrong stock market: not the main Frankfurt market, but some electronic side market with hardly any trade on it. Fuck!

Right after that the stock started rising steadily, and I couldn't get myself to pay more than 160 now. The Wii was launched in November and as its success became obvious, Nintendo shares shot up to 220 euro/share. I could have already had 35% profit by then, so I was cursing Keytrade every day! But then the stock started falling again for no apparent reason. I read all Nintendo news to make sure this was just a fluctuation, then ran to the bank and got myself 50 shares at 203 euro/share, a substantial investment of 10150 euro. This was on February 22nd, almost 3 months ago.

Ever since then the stock has been slowly rising and I've been telling people how much my profits were, but always added "but if that damn web site had bought my stocks in September, I'd have xxx more profit". Today the Nintendo stock price is over 253 euro, and my profit over 25% in just 4 months. It would be 60% in just 8 months, but now that I've told the whole story here I'm gonna shut up about it :) Here's a 1 year graphic of the price, showing that nice valley in late February where I got my stock :)

The Wii is a bigger success even than anyone imagined; even half a year after its release every new batch is sold out immediately. In Japan, home market of both Sony and Nintendo, the Wii has been outselling the PS3 at a rate of 7:1 the last few weeks (stats here), while Wii-games outsell PS3-games at a rate of over 25:1. In the rest of the world the Wii is less dominant, but still a big hit. Meanwhile Sony is reporting huge losses on its gaming division.

I'm not planning to sell anytime soon since I expect Nintendo's stock price to rise more. It still has to get to a point where supply is high enough to meet demand, and the first big wave of third-party games is yet to come. Only after that will the market realise Nintendo's success fully. Or so I hope :) In any case, this investment game has been a lot of fun already.


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