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Monday, February 27, 2012

"Nintendo Will Not Return To Profitability"

So Michael Pachter has this to say about Nintendo:
They should have, and because they didn't, the decline in Wii and DS hardware and software sales drove them into generating LOSSES. For those of you who aren't financial analysts, losses mean that the company is worth less than it was before. Nintendo stock has dropped by over 80% in the last few years, and the market has appreciated over the same period. I'm paid to advise investors, and none have made a profit owning Nintendo stock. I don't think that many will make a profit over the next few years, because I don't think Nintendo's strategy will return them to profitability.
I am not a financial analyst, and I'm not going to argue with Pachter over whether or not he's right. He has access to a lot more information than I do, although he's been saying that Nintendo's going to release a Wii HD repeatedly and hasn't been right so far.

I'm also not going to argue the point that the 3DS is doing great now after a rocky start, and that analysts' repeated calls for Nintendo to join up with smartphones is a complete waste of time, ink and breath. I'm not going to argue that the vision of a company like, say, Apple was run almost entirely off of the ideas of one man as opposed to a corporate culture like Nintendo.

I'm also not going to argue that while Nintendo is worth less now than they were two years ago, that was when Nintendo was at its absolute, once-in-a-lifetime peak, and I'm also not going to bring up the fact that  Nintendo has consistently weathered the tough times far better than other industry darlings and for far longer.

I don't believe I can argue with Pachter, especially since he tosses in this withering bon mot at the end:
If the context above infuriates you, go back to school and pay attention, then read it again ;-)
Since I do not have the time to go back to "school," where, most assuredly, Mr. Pachter learned a great deal about profit, judging from this statement:
I'm paid to advise investors, and none have made a profit owning Nintendo stock.
I understand that he means "in the last two years," or at least I would hope so. If he means what he wrote, that no investors have ever made a profit owning Nintendo stock, then it is quite possible that Mr. Pachter must go back to school.

No, I won't argue any of these points, since I am obviously not capable enough to argue any of them. So instead, I'll just sit back, enjoy my Nintendo products and accept their inevitable decline into obscurity. After all, he's a financial adviser. Surely none of them have ever been wrong.