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
I am reading today that RIMM passed Motorola in market cap (if you live in Toronto, all you read about is RIMM). That makes sense to me. I don’t think Motorola is relevant in my tech life these days. RIMM is integral to my life. I can’t function as a businessman without my Blackberry.
You can’t value that properly. Too new. That’s why the shorts have been bludgeoned.
Now, Carl Icahn is a smart dude. He believes that Motorola is undervalued. He is generally right. He is likely right here. He is patient and maybe is not bothered that RIMM is screaming higher. He should be.
He would have made WAY WAY more money looking at the issue from a Blackberry user’s point of view. Instead, he is down in his Motorola position and watching Blackberry climb 100 percent since his move on Motorola.
Nintendo recently blew past Sony in market cap. Now that shocked even me. I own both. I love the Wii and so do my kids, but I am not as convinced on that one. I think both keep rising for now.
Disclosure – Long Sony and Ninetndo
When the mood of the market turns (it will), the real valuation gap between the two companies will get more realistic. If you can guess win (you can’t and should not be guessing), you win.
2. Load the middle of the floor with playstations attached to big flat screens
3. Hide the freaking Sony laptops and PC’s. They are not that hot.
4. Be honest…Open a ’super genius’ bar because that’s the honest truth about what it takes someone to get Vista loaded. Let the ‘peeps’ come and complain.
5. Sell MacBooks and Apple products AT THE BACK of the store. Apple is displaying Sony flatscreens in their stores. Return the favor and you will get some customers to walk through your stores.
If I ran a private equity firm or big money, that’s how easy it would be to make money these days. Rumors are everywhere and stocks are gapping higher on the hint of merger and private equity news. Sophomoric and silly market behavior that is more a sign of late stage good times I think.
The blogosphere is making it easier to bait greed as journalists have never had more ways to be trumped and are likely rushing stories. they might have sat on 5 years ago. Look at the New York Post breaking the (not HAPPENING) Microsoft/Yahoo news as a recent example. Just today I am reading a post at TechMeme that pruports that Ericcson may be buying Motorola .
Greed is definately back near all-time highs. Funny thing is, it’s the freaking rich doing it as usual.
Some good news though…The information age may actually hurt the new greed mongers. There have never been more ways to be tracked, and caught. That’s old media’s best friend now. The good stories, ones that require research and good journalism, will be the tracking and catching of the new greed mongers and insider traders.
Now back to Apple buying Sony. I was downing some coffee with my friend Roger Ehrenberg the other day and we were chatting about Sony being undervalued. He was on CNBC explainig his case and answering some strategic questions that Sony must deal with.
We both agreed that it could make sense for Apple to buy Sony as he explains better than me. He has many posts on the gaming, content and media content industries that are worth exploring. Interesting that 3-4 years ago, Sony should have been buying Apple for a fraction of their cost.
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.
Of all the Wallstrip companies we covered so far, Sony was the one that was not Wallstrip worthy based on price. The point of the show was to discuss how a stock and a great product do not go hand in hand.
Things are changing…fast. As of today, the stock is up 30 percent since the show.
I am thinking of pulling the trigger on a little weakness. Here is why. I like tech. I like video. I like PSP’s. I like Japan. I like the brand.
I like the fact that all you hear about is the Wii, but Sony is rising.
I think t’s their dominant position in video that has crept into the picture. The web in 90 years will be all voice and video.
Today on Wallstrip we check in on Sony. Kids have lined up for weeks to get a first shot. Big Woop if you are a Sony shareholder. Here’s the lifetime chart.
I must admit I have absolutely no interest in video games. But, my son loves his PSP. He is not the only kid (or adult). He does not give his Playstation 2 the time of day, but I am sure that day will come. The PSP is the perfect product for an 8 year old boy. Despite the KID love, the stock remains a DOG! Why?
Sony the company still lacks a catalyst. It’s too big, too slow, too clunky. Some great products, but no catalyst. The right wing hates them to boot.
I want to look at Apple, Sony and Oakley to compare a great product being turned into a stock catalyst.
First Apple. People continue to look at Apple and say – it’s the iPod that remade this company – it won’t continue. No doubt iPod sales will not grow continuously, but the catalyst was it’s delivery and the Apple Store. That part of Apple will continue unabated for some time.
Sony could open 1,000 stores and it would not dent the bottom line. In fact, it woulld serve to piss off their main sources of retail distribution.
Oakley has a wicked product in their RAZR sunglasses and the means to deliver it (mall stores), but they can’t or won’t do it well. They prefer to lock them up behind glass doors while you wait 10 minutes for a salesperson to unlock the cabinet and hand you a pair that has no music.
WTF! Is there not one Oakley executive that has been in an Apple store? If they fix it, their stock could run.
When Sony decides to unlock some of it’s growth components and spin them off, you may have some growth tickets. But Sony the stock… come on. If you can’t find something better in this market, you are not Wallstrip Worthy !
Disclosure – No positions in Sony or Oakley. Long Apple.
and uber good financial blogger 
