Since the late 1980s Nintendo (((OTC: NTDOY) It was the dominant force in the video game industry. We continue to provide popular hardware devices such as Nintendo Switch and build a rich library of entertainment franchises such as: Mario And Zelda.. Historically, the company hasn’t done much outside of video games.
This could all be changed by the company’s new initiative in the coming years. Here are four ways Nintendo is moving beyond video games and what that means for stocks.
1. Theme park
Nintendo Comcastof (((NASDAQ: CMCSA) Universal for building four different Nintendo-based theme parks around the world. These parks, called Super Nintendo World, are located in Japan, California, Florida and Singapore, all located as a subset of the existing Universal Theme Park locations. Japanese parks have just opened, but the other three will open within the next five years.
The main attraction in Japan is Mario Kart Ride, which wears augmented reality (AR) glasses that make people feel immersed in one of the game’s famous race circuits.The park is universal DisneyIt took decades to reach its current location, but it looks like a great place for families with young children to spend the afternoon.
2. Stores and products
Nintendo Having always sold several products and partnered with other retailers to spread the brand around the world, the company is now focused on selling the physical products themselves. This includes not only online stores, but also the ever-growing number of physical stores around the world. With stores only in Tokyo, New York and Tel Aviv, growth is slow, but there are signs of some expansion. Five pop-up stores will open in Japan this summer. This shows Nintendo’s willingness to expand its physical retail products.
3. Movies and TV
Nintendo has partnered with Illumination Studios (another Comcast subsidiary), one of the world’s leading animation studios, to move to video entertainment.Both companies are working on Super mario A movie to be released in 2022. This could be a starting point for following more movies and TV shows.
Shuntaro Furukawa, president of Nintendo, said this year that animation is something the company is watching carefully and will not be limited to Mario’s franchise. If Nintendo can start producing a stable number of movies and perhaps TV shows, the business has the potential to generate consistent profits for the foreseeable future. In addition, the addition of Illuminations founder and CEO Chris Meledandri to Nintendo’s board of directors is further evidence that Nintendo takes video entertainment seriously.
4. Augmented reality
In March of this year, Nintendo announced that it would partner with Niantic, a company that owns a major stake, to build AR applications based on Nintendo’s various franchises. Niantic is the company behind the hit Pokemon GO Being a game, it has some of the best AR technologies in the world.The first game is based on lesser known Pikmin It is a franchise and will be available later this year.
Interestingly, according to a press release, these apps are broader than traditional games and seek to be more interactive with Niantic’s AR capabilities. For example Pikmin According to a press release, the app is “designed to encourage walking and make activities more enjoyable.”
Meaning for stocks
Nintendo is a slow-moving company, but as you can see, management has multiple initiatives to grow its business over the next decade. The stock is currently trading at a market capitalization of $ 68 billion, which is only $ 53 billion if the cash on the company’s balance sheet is omitted.$ 5.8 billion in the last 12 months Operating income, Stocks are traded at a low price-to-operating margin of 9.
If the company can implement these new initiatives while stabilizing video game profits, its operating profits will grow steadily over the next decade, which will be good news for Nintendo shareholders.
This article represents the opinion of a writer who may disagree with the “official” recommended position of The Motley Fool Premium Advisory Services. We are miscellaneous! Asking investment treatises, even our own, helps us all think critically about investing and make decisions that help us to be smarter, happier, and richer. I will.
4 Ways Nintendo Moves Beyond Video Games
Source link 4 Ways Nintendo Moves Beyond Video Games