Nintendo's Stock Takes a Nose Dive
By Dustin WilsonKhadgar. Wednesday, June 8, 2011 5:08:02 PM
Nintendo's stock dropped dramatically today, presently at the time of this writing 6.12% down -- a five year low for the venerable Japanese company. This is a troubling turn of events, and isn't a good sign at all after they've just announced a new console at Electronic Entertainment Expo 2011.
Many things can factor into this, but it's my opinion that it's because of the entire way they've handled this new console and a backlash caused from misinformation. The presentation was especially bad. Nintendo's able to put off a good show, but this presentation yesterday was perhaps one of their worst I can think of in terms of delivery. It was delivered awkwardly, and truthfully I think it was delivered too early as all Nintendo had to show at the presentation was a new controller.
The first mistake they made started when they decided to call the new console Wii U. Wii was a horrible name in the first place, especially for English speaking people. Every time you use Wii and play in the same sentence you're creating an unintentional euphemism. This console should have by name alone be differentiated from its predecessor. On top of that mistake they made another one by making the console itself (stupidly not shown during the presentation) and the new controller use the same design aesthetics as the Wii. Visually it looks like a Wii, and by name it is a Wii -- just a newer generation. However, the fact that the controller came with a new console wasn't made abundantly clear at all during the presentation.
It is amazing that Nintendo could actually make a presentation on just a console's controller. I can't think of another console you could really do that with, but they made a huge mistake in not actually showing the console itself. They didn't even mention the console at all. This led people to believe the controller's being shown off was just yet another accessory for the Wii. Why not believe that? It's being called on stage the Wii U; it's got Wii in its name; it's white plastic like the Wii is. Investors saw that and panicked. They saw Nintendo as being incapable of producing a next generation console, focusing instead on creating more accessories for their existing one. If I thought that I would have bailed on my stock as well.
The picture used in this article is a photograph of Nintendo's President and CEO, Satoru Iwata, showing American Nintendo fans on Twitter that there indeed is hardware to go with the controller. This shouldn't have been necessary, and is quite embarrassing to have to do. Even after this image was posted people still believed it was just an accessory for the Wii simply because the new Wii U console looks like the Wii we currently use. If you just glance at the photo without analyzing it's quite easy to mistake the Wii U for a Wii.
With all this said, what do I think about the console itself? I think it's brilliant, and if people want to invest in Nintendo this might be a decent time to buy up some stock. Nintendo's competition laughed at the Wii, and today and at this year's E3 in fact Microsoft was making casual games utilizing its Kinect accessory -- copying exactly what Nintendo was doing a few years ago. I really like the new controller, and the uses for a second screen are already obvious to anyone who's played DS games. Nintendo seems to have third party developers on board with this console with full-fledged hardcore titles announced for the new console, something it hasn't had since the SNES. Whether or not many of them will be available at launch is a different story. Just having big time third party developers on board is immensely great news. While in my opinion Nintendo is by far the best game developer out there its console can't survive on infrequent Nintendo-produced game releases. My only worry with it is whether it packs enough punch under the hood to survive the next generation of consoles. Leaked specs for the tiny box shows that it might.