Seth Fischer, one of Asia's best-known hedge fund managers, has written to Nintendo Co Ltd urging the Japanese console maker to develop and sell games for mobile platforms run by Apple Inc and Google Inc.
Fischer, of Hong Kong-based Oasis Management Co Ltd, sent a similar letter in June to Nintendo, in which Oasis owns shares. His latest missive adds to investor pressure for the company to move on from making games only for its propriety consoles.
"Nintendo needs to embrace this thematic change in consumer demand, behaviour and expectations to stay relevant," said Fischer, Oasis' chief investment officer, in a letter on Wednesday obtained by Reuters.
"It is readily apparent that the standard elasticity of demand principle no longer applies in the consumer entertainment market when access requires the purchase of a physical product," Fischer said in the letter to Nintendo Chief Executive Satoru Iwata.
Nintendo relies on the popularity of its franchises, such as Mario and Zelda, to drive sales of its hardware, but investors fear Nintendo is missing out on opportunities offered by smartphones or tablets, over 1 billion of which are in use and account for a rising proportion of games played.
Mobile games developer King, for example, generated $1.9 billion in revenues in 2013, or $5 million a day, from its game Candy Crush Saga which has been downloaded more than 500 million times since its 2012 launch.
The importance of mobile platforms for technology companies was driven home last week by Facebook Inc's $19 billion purchase of messaging app WhatsApp, which followed a similar acquisition by Rakuten Inc the week before.
"As the holder of what is arguably the largest library of casual games, Nintendo is well placed to make an immediate entry into mobile," Fischer said.
More at the link:
http://uk.reuters.com/article/2014/02/26/uk-nintendo-hedgefunds-idUKBREA1P0IU20140226