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Michael Pachter offers analysis in response to Wii U price drop/2DS.

Tripon

Member
On Wednesday, Nintendo (TYO:7974) announced a $50 reduction in the suggested retail price of the Wii U Deluxe bundle to $299.99. According to the press release, which is included on the next page, the price reduction will go into effect starting September 20 ahead of the release of the Xbox One and PS4 this November.

We expect the price cut to drive higher sales, but believe the Wii U will remain challenged by a lack of compelling first- and third-party content this holiday. By the time a significant number of high-profile Wii U games have been released, Microsoft’s Xbox One and Sony’s PS4 will have launched, creating direct next generation competition and impacting any potential lift from those titles.

Nintendo also announced the 2DS Portable, which will be released on October 12, and will play all 3DS and DS games in 2D. The 2DS will debut at $129.99 and will be essentially identical to the 3DS with a 2D screen. The 2DS provides a more affordable entry point for Nintendo’s handhelds, and should drive sales 25% higher over the near term. We think dedicated handheld gaming device sales will remain hallenged by the ubiquity of smart phones and tablets.

Nintendo largely reiterated its December quarter game lineup including The Legend of Zelda: The Wind Waker HD, which will feature its own limitededition Wii U bundle at launch. Other Wii U games during the quarter include Wii Party U, Super Mario 3D World, Donkey Kong Country: Tropical Freeze, Wii Fit U, Mario & Sonic at the Sochi 2014 Olympic Winter Games, and third-party titles. 3DS releases include The Legend of Zelda: A Link Between Worlds, Mario Party: Island Tour, two Pokémon games, and third-party titles.

The previous quarter’s handheld guidance has become more realistic given the introduction of the 2DS. We think that Nintendo’s high-quality handheld lineup and the new price point for the 2DS will allow hardware sales to grow, and should trigger a rebound in demand and sales for handheld software. We have modeled 2DS/3DS hardware sales of 17.4 million (slightly below guidance of 18 million) and software sales of 72.9 million (below guidance of 80 million).

Maintaining our NEUTRAL rating and raising our 12-month price target to ¥12,000 from ¥10,000, a premium to Nintendo’s ¥8,000/share in cash and investments, approximately a 10x forward EV/Adjusted EPS multiple. Our target reflects our expectation of continuing weakness in handheld demand.

Nintendo is currently trading at 11220 yen on the Tokyo stock exchange.
 
Hey guys, remember that people actually want to hear these words of guidance in response to changes in market conditions. They, in fact, pay for it. Seems "obvious" to you, but his investor readers aren't keeping their ears to the ground. This might be the first they've heard of (a) the price drop on Wii U and (b) the 2DS and, yes, they'll want to know what it means for Nintendo stock performance.
 

hamchan

Member
If only this thread reflected his actual full sentence and not just a bit cut off from the full sentence, then I can see why people would mock him. Any excuse to mock this man though, right guys?

Also it's not like he's wrong about this.
 

Parapraxis

Member
How effective were those previous (significantly larger iirc) non-official price cuts at several retailers in the UK?
Anybody have pre/post cut sales from any of those retailers?
 
So a drop in price nearing the holiday season will result in the sales of the Wii U trending upwards, not downwards. A very bold and risky prediction.
 
I agree with this. Especially about Wii U's line-up not bein strong enough to deter any kind of significant interest away from next-gen launch.

He must read GAF.
 

ASIS

Member
I hate defending Patcher, but these pieces aren't directed at hardcore gamers or sales-age, they're directed at potential investors who aren't as hip to the ins and outs of the video game industry.

It was more targeted towards the title. The last sentence is actually good analysis, and the article itself is OK. But man dat title.
 

Tripon

Member
It was more targeted towards the title. The last sentence is actually good analysis, and the article itself is OK. But man dat title.

I try not to change the title when I make a new thread, except for that one time....
Wallstreetcheatsheet needs a better headline writer.
 

_PsiFire_

Member
Nintendo hardware sales always spike in the months leading Christmas in NA, not to mention games are actually coming out for the system. Pachter is soon bright. *rolls eyes*
 

Phazon

Member
This is not about gamers, sales, companies etc. It's advice and analysis for investors. (and let's be honest, Nintendo isn't a company for short term profits. Wii and DS were exceptions)
 

Cmerrill

You don't need to be empathetic towards me.
It's true. I'm going to pick up a Wind Waker bundle, never played it on the Gamecube; really looking forward to it.
 

jello44

Chie is the worst waifu
Hey guys, remember that people actually want to hear these words of guidance in response to changes in market conditions. They, in fact, pay for it. Seems "obvious" to you, but his investor readers aren't keeping their ears to the ground. This might be the first they've heard of (a) the price drop on Wii U and (b) the 2DS and, yes, they'll want to know what it means for Nintendo stock performance.

Facts have no place here!
 

pixlexic

Banned
I can say that this is the first the people who said " I will wait for a price drop" were correct in doing so. They literally missed nothing.
 

Marlowe89

Member
Hopefully those sales will go higher than typical expectations. At this point, I can't even keep track of how many people I've heard claim they were gonna purchase the Wind Waker HD bundle.
 
Hey guys, remember that people actually want to hear these words of guidance in response to changes in market conditions. They, in fact, pay for it. Seems "obvious" to you, but his investor readers aren't keeping their ears to the ground. This might be the first they've heard of (a) the price drop on Wii U and (b) the 2DS and, yes, they'll want to know what it means for Nintendo stock performance.

Yep. I love all the shitty responses, as if Pachter is out there making predictions for glory on GAF. He gets paid to do this, his business has nothing to do with us personally and we only listen to what he says because the industry happens to be a hobby of ours.
 

Wasp

Member
I wonder if either PS4 or Xbox One total sales could overtake the Wii U's lifetime sales before the end of the year?

Would be hugely embarrassing for Nintendo if it did happen.
 

Gleethor

Member
I wonder if either PS4 or Xbox One total sales could overtake the Wii U's lifetime sales before the end of the year?

Would be hugely embarrassing for Nintendo if it did happen.

I think supply would prevent that from happening.
 
I wonder if either PS4 or Xbox One total sales could overtake the Wii U's lifetime sales before the end of the year?

Would be hugely embarrassing for Nintendo if it did happen.

I think most of neogaf is up for a surprise and a rude awakening....
 

McHuj

Member
I disagree with him. There will be a dump. It might even double it's sales, but I don't think it will break 100k.
 

Kuro Madoushi

Unconfirmed Member
Remember guys, Pachter said we don't know what we're talking about. I mean, I never realized that lowering a price would drive sales.
 

-COOLIO-

The Everyman
random, pointless, offensive comments from gaf about an article that isnt aimed at the hardcore gaming audience. whoo!
 

x-Lundz-x

Member
It's still not enough of a cut to get the WiiU where Nintendo wants I think. Then again with the total lack of software that gamers care about these days even 250 might not be enough.
 
I don't understand, what reason is there to believe the PS4 and X1 will do as bad as the Wii U? Other than the never ending "consoles are dead!!" Doomsayers who've been at it for years

The issue is outselling it before the end of the year. That's still 3.5-4 million units to sell, and given MS seems to be having trouble ramping production the only one that could do so would be Sony. But again getting 3-4 million units out before Jan might be difficult.

I don't think it will take long though. I'd expect one of the two to be there by Feb.
 
With a price reduction and a lineup of Nintendo's most popular series, I expect Wii U sales to decrease.

t_screwattack_avgn_battletoads_gt-n.gif
 
It would be nice if most of you guys/gals could read the OP.

The thread title is only a half-quote and has almost derailed the thread alone. Most of the replies are variants of "duh/lol."

Here's the (console) meat:
We expect the price cut to drive higher sales, but believe the Wii U will remain challenged by a lack of compelling first- and third-party content this holiday. By the time a significant number of high-profile Wii U games have been released, Microsoft’s Xbox One and Sony’s PS4 will have launched, creating direct next generation competition and impacting any potential lift from those titles.
 
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