Gaming has been ALL about boys…until NOW. The Wii has changed things and not in some ‘itsy bitsy’ couple year trend kind of thing, but in a big ball busting trend kind of way. I have seen the future and the future is…Rachel fighting Max for the Wii.
With Nintendo (NTDOY), the boys and ‘man boys’ markets are a LOCK. If you buy the stock today you need another catalyst…I mean the cats out of the bag no? They don’t do their own retail like Apple, you can’t play the games on an iPhone and you don’t play them on Macs. That said, I think they have a giant catalyst in girls, women and the family unit. If you are skeptical and refuse to buy a Wii, go to a friends house with your family and play Mario Kart.
If you don’t already own Nintendo (NTDOY) , you can’t blame me. I have been bullish and long since the 30’s, we Wallstripped it and now a year has past. Here’s a good post of mine from last May and not much has changed in the story except the price of the stock. In gigantic stocks, waiting for 10-15 percent pullbacks can be expensive. I was not early when I got in, but I never am. Obviously the question today after it has doubled yet again…is now too late?
I could bore you with metrics but that could not help me justify anything…thank goodness though because I would be broke if I only owned cheap, low P/E stocks. I bought some more this week for me and the kids despite it being off it’s all-time high and despite the fact that I have actually sold some at lower levels for my fund.
The chart and stock trajectory is breathtaking and a spitting image of Apple . I think both companies have a lot in common in what lies ahead (girls, women and families – Apple having the big edge with their fantastic retail), but this post is not about Apple.
Girls will play the Wii. Color me not totally convinced on Wii fit, but it can’t hurt and will continue to evolve and expand.
Our biggest KnightsBridge investment to date, and our first, was last year GreenScreen Games . One of their studios – SuperVillain (Tony Hawk) – has the major game launching and it’s for a market that is not their bread and butter – anyone but a boy.
Check out the next big type of gaming hit (click on image to enlarge):
The ‘girls, women and family unit’ is not factored into today’s prices because ANALysts have nothing to really compare it too. That’s good..
Gamestop (GME), despite my hate, has an almost monopoly and everybody is and will gun for that market – EXPANDING THE PIE. Best Buy (BBY), also despite my hate, can’t sell laptops, PC’s, washing machines, flat screens or music for profit anymore. But gaming…
PlayNTrade is one of the fastest growing franchises and I love this local Phoenix franchise idea of Gamestop on wheels called ‘The Game Truck ‘.
I am of the feeling that Nintendo could go wild still. I mean it gets Nasdaq ‘Pink Sheet’ love only and although the brand is everywhere, NOBODY owns the stock.
Do you? Better yet…does your cab driver?
PS – I still stand by my statement back in my March 2007 post…’If marijuana is legalized, all the gaming stocks double again overnight!’
PSS – I did a whole bullish trend scenario for gaming and did not mention ‘Guitar Hero’ or ‘Rock band’ even ONCE (until now ).
PSSS – When I think of ‘Breathtaking’, I think of Seinfeld (also the ‘Shrinkage’ episode):
PSSSS- Going offblog until Wednesday as the Lindzon’s hit the road for the summer. Don’t do anything crazy.
Disclosure – Long Nintendo, Electronic Arts and GreenScreen Games.
I have not been shy about gaming and gaming stocks. Long-term this trend is and has been money. We have covered Sony , Electronic Arts , Nintendo , Gamestop and Microsoft (it can’t be Vista) on Wallstrip.
My favorite in the space has been Nintendo. I was buying and recommending it way back in March when it had already risen 300 percent rather quickly. It has still more than doubled since than. The phenomenon will only grow.
I have owned this stock before but have mainly stuck with Electronic Arts, Sony and Nintendo as my proxy for the game market (the stock should rocket higher tomorrow so I am bummed of course). With respect to Sony and have taken much ridicule for that at a recent dinner in San Francisco (but it is on fire lately too).
Building games is a gigantic market but is becoming more like the movie business and that’s why this move by Vivendi is underway. Activision is ruling the game world these days with Guitar Hero and today’s Wallstrip pretty much sums up why.
Easier than the real guitar and a good reason to get smashed and live out your rock star fantasy. Guitar hero is UNSTOPPABLE as will all of it’s offspring.
Brian takes a look at the activision pricing picture to wrap it up:
In the end, don’t think too hard. This trend is something that all investment portfolios should have exposure too. Take your pick.
Disclosure – Long Nintendo, Electronic Arts and Sony
My kids own XRAY but for some reason I never bought any after our Wallstrip show. They just keep blowing away numbers. Also one of my fave starring roles and ideas from waaay back on Wallstrip (our tribute to the great ‘Marathon Man‘ ). Reminds me that I need to go see this dude for a toothache. He is really that scary. AND, I should have bought more .
Electronic Arts which I blogged about buying down 20 plus percent months back is ripping higher as well. I will lighten up a little here after the great run. Hre once again is the awesome Frank Caliendo, who is getting his own show on TBS, doing John Madden (a serious tangent, but related to ERTS through Madden’s Football). Enjoy:
I was having a coffee with Barry Ritholz last week and he joked that Starbucks is now opening stores inside their stores to fuel growth. It’s not quite that bad, but definitely a funny comment.
The iTunes/Starbucks deal was genius. The nerds and bloggers are whining about the expensive giveaway, but they would not know marketing or long-term thinking if it walked up and poked them in the eyes. They can’t get out of their pajamas to go to a normal job.
As is my style, I have used the 30 plus percent drop from all-time highs to buy some stock. It has continued to drift downward. I bought some more in the $26’s. As Fly says…WINTER IS COMING. It’s not cheap, but I never care about P/E anymore or valuations.
As I write here often, my all-time high buying is focused on the fastest of the fastest. With the older, big, baddest, beastiest of the brands, I prefer to buy 20-30 percent drops. International Game Technologies, Electronic Arts and Starbucks are the ones that have fit the bill this year for me. I have been amply rewarded in ERTS and IGT…Starbucks time may be upon us.
The New york Times interviewed Howard (the coffee one) this weekend for his take on the growth potential. My thoughts…it is a big world out there and Starbucks will be rewarded for their continued expansion. This brand is worth owning for the long-term down 30 percent plus from all-time highs.
The stock is on fire for sure. I can hear the typical excuses already…
The Wallstrip show is late. The P/E is too high. It’s a Pink Sheet stock and an ADR for crissake! The graphics suck. It’s a fad.
Not bad, but there is something else at play here. That something is ‘Stock Culture meets Pop Culture’ . For instance, here are all the Wii blogs . That’s passion.
Flickr photo’s…trust me they are insane.
YouTube – go search for yourself. OK – here you go .
This machine, stock and company are gaining momentum into our psyche’s. We finally got Max a machine for his eighth birthday and Wallstrip stole it on our trip to new York. Lindsay hit max in the head, nerds were athletes, and we had a Wallstrip party that turned into a Wii tennis tournament….on a Friday night in New York!
Maybe – OR – maybe we are seeing another iPod phenomenon where you would have been happy to buy into the Apple craze in 2005, a couple years after the iPod craze was beginning.
Time will tell, but I am a believer in the Wii craze. So is my really old friend and uber good financial blogger Jim Kingsland .
For a good look at the technical picture, here is Brian’s take:
The market is really hot and rewarding big growth ideas. If the market turns, high growth stocks fall fast. Nintendo is a Pink Sheet ADR and as Brian points out, it is thinly traded and subject to higher volatility (wilder price movements). Don’t forget that.
I have passed on the Wii hype for now because I figured we had a Playstation 2 or 3 and my son rarely plays.
BUT ,
I saw the Electronic Arts commercial for Tiger Woods Wii Golf game and the WHOLE family went WOO for the Wii at the same time. This is a can’t miss homerun. This is great for golf, families, gaming, Wii, and Electronic Arts. That’s just off the top of my head.
I just saw Andy’s post on Wii and I am reminded of the two extra addiction and adoption factors – ease of use and big screen TV’s.
The obvious long-term benefactors remain the same: Electronic Arts (ERTS), Nintendo (NTDOY.PK), Activision (ATVI), Gamestop (GME), Best Buy (BBY) and even Sony (SNE).
Today, Gamestop (GME) exploded to another all-time high and Activision looks poised. Electronic Arts was up big as well. Sony has been on a tear of late despite the Wii kicking it’s ass.
I am glad to have caught Electronic Arts down 20 percent. Keep your eye on this sector for inevitable selloffs as their will continue to be massive gains in the years ahead.
On Wallstrip , we have covered Sony and Electronic Arts . Looks like we will be doing more on this sector in the months and years ahead.
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