Nintendo’s (OTC: NTDOY) performance at this year’s gaming expo known as E3 depends on your point of view and expectations. The legacy console maker’s E3 presentation was certainly fun – as to be expected from Nintendo – yet it failed to deliver what critics and most importantly, the buying public, desires: an influx of surefire hits that will be played for years to come.
It will be interesting to see if Nintendo’s stock dips below the $40 level in response to the company’s slightly underwhelming E3 performance. At the moment, Nintendo is priced around $42. But, that doesn’t mean you should rule out the stock entirely.
The Good News From E3
Nintendo started E3 off the right way by announcing the addition of Fortnite to its lineup. The news was made public the week prior to E3 in an effort to build momentum for the big gaming get-together. Fortnite is certainly an important addition as it has quickly become the most popular video game in the world, yet it will only be able to carry Nintendo so far.
Those who are happy with Nintendo’s E3 showing point to footage shown of Super Mario Party, the new edition of Super Smash Bros., Overcooked 2, Mario Tennis Aces, Daemon X Machina and the new Pokemon game. These are certainly Switch titles fans will look forward to in 2018 and 2019.
The demo of Mario Tennis Aces played flawlessly when released to the public earlier this month. Super Mario Party provides more than 80 new minigames. The new edition of Party will be available for download and in-store purchase in early October. It should be another console-seller as the masterminds behind the series have brought back the game’s signature design board game-style design and play that made game so popular prior to its appearance on the Wii U. The new version of Super Smash Bros. is yet another can’t-miss hit. These three titles will carry the Switch through the holiday season. The arrival of a new Pokemon game as a Switch exclusive is the icing on the cake.
Now for the Bad News…
Those who are disappointed with Nintendo’s E3 performance point to the company’s now-common game delays. Some previously announced titles like Yoshi for Switch have been neglected by Nintendo in months past. The game has been delayed into 2019.
Nintendo loyalists are willing to wait for their favorite games, yet there is not much to look forward to in the Switch lineup for the remainder of 2018 outside of half a dozen titles. This is a concern as the console is only about a year old.
It is also concerning that Nintendo representatives were mum on the Switch’s online service and whether Super Mario Party will support online play. This somewhat disappointing E3 performance is the primary driver behind the company’s recent stock dip. Nintendo’s stock is down about 10 percent since E3 started on June 12.
The Final Verdict
It would be quite the gamble to invest your hard-earned money in Nintendo at this point in time. The company seems to have the handheld market well-managed, yet it just cannot seem to strike gold with its consoles. Some question whether Nintendo will exclusively focus on handhelds after the Switch era comes to a close in a couple years.
Nintendo bulls are adamant the Switch will continue to sell well beyond 2018. Konami has signed up for two games. Square is bringing several Japanese RPGs (JRPGs) to the Switch in 2018 and 2019. A new FIFA soccer game is scheduled for 2019. The Switch’s burgeoning indie title library available through the online electronic shop is quite impressive.
When the dust settles on the switch around 2020, the question will be whether the massive investment in the console proved worthwhile. By that point in time, investors will likely be questioning whether Nintendo will pivot away from traditional consoles to focus on games, dominate the handheld market, and possibly work on side projects like the disappointing cardboard Labo offering.
If you believe Nintendo and its third party game-makers can bring a dozen-plus high-quality titles to the Switch in the next couple years, the stock will likely increase toward $50. If Nintendo dips below $40 and moves toward the $35 range, consider adding a small stake to your portfolio.
Regards,
Ethan Warrick
Editor
Wealth Authority
