Video game sector shines in jittery Tokyo market
Video game-related stocks were a rare bright spot in the Tokyo market Wednesday, as investors sought refuge in Nintendo, Sony and others amid a sea of red stemming from growing unease over the health of European banks and falling long-term rates in Japan. Nintendo ended Wednesday slightly higher at 27,130 yen ($270). After a dramatic roller-coaster ride in July, the company's stock has been gradually recovering. [...]
Investors have been drawn to Nintendo's competitive content. Following up on the hugely popular "Pokemon Go" smartphone game, the company is gearing up to release "Super Mario Run" for the iPhone. It is also expected to launch the Nintendo NX game console next year. "Major buying incentives are lined up," said Takeshi Koyama of Mizuho Securities. Other video game-related stocks, such as DeNA and Bandai Namco Holdings, are also doing rather well. There are growing expectations that virtual- and augmented-reality technologies will create lucrative business opportunities, possibly beyond what most people can now imagine, for the video game industry. [...] "We cannot figure out how much the new game console may contribute to earnings, since we only have limited information about it," said Sumito Takeda at UBS Securities Japan. Considering this, current "long-term growth expectations (for Nintendo) are excessive," he added. By contrast, Hideaki Kuribara at the Tokai Tokyo Research Institute sees Nintendo outperforming the market, with a target price of 35,000 yen. "Nintendo is a major intellectual property holder that has just a handful of others to match in the world," he noted. Once the company successfully launches the new game console, Nintendo "will enter a new period of earnings growth," Kuribara reckoned.
"It is difficult to evaluate Nintendo's corporate value because content and other non-financial information weigh so heavily," argued Shingo Ide of the NLI Research Institute. [...] "We won't be able to produce returns unless we keep up with market trends," an asset manager at a Japanese investment fund said, explaining the quandary in making such portfolio decisions.
Source: Asia Nikkei, Nikkei
Video game-related stocks were a rare bright spot in the Tokyo market Wednesday, as investors sought refuge in Nintendo, Sony and others amid a sea of red stemming from growing unease over the health of European banks and falling long-term rates in Japan. Nintendo ended Wednesday slightly higher at 27,130 yen ($270). After a dramatic roller-coaster ride in July, the company's stock has been gradually recovering. [...]
Investors have been drawn to Nintendo's competitive content. Following up on the hugely popular "Pokemon Go" smartphone game, the company is gearing up to release "Super Mario Run" for the iPhone. It is also expected to launch the Nintendo NX game console next year. "Major buying incentives are lined up," said Takeshi Koyama of Mizuho Securities. Other video game-related stocks, such as DeNA and Bandai Namco Holdings, are also doing rather well. There are growing expectations that virtual- and augmented-reality technologies will create lucrative business opportunities, possibly beyond what most people can now imagine, for the video game industry. [...] "We cannot figure out how much the new game console may contribute to earnings, since we only have limited information about it," said Sumito Takeda at UBS Securities Japan. Considering this, current "long-term growth expectations (for Nintendo) are excessive," he added. By contrast, Hideaki Kuribara at the Tokai Tokyo Research Institute sees Nintendo outperforming the market, with a target price of 35,000 yen. "Nintendo is a major intellectual property holder that has just a handful of others to match in the world," he noted. Once the company successfully launches the new game console, Nintendo "will enter a new period of earnings growth," Kuribara reckoned.
"It is difficult to evaluate Nintendo's corporate value because content and other non-financial information weigh so heavily," argued Shingo Ide of the NLI Research Institute. [...] "We won't be able to produce returns unless we keep up with market trends," an asset manager at a Japanese investment fund said, explaining the quandary in making such portfolio decisions.
Source: Asia Nikkei, Nikkei