Nintendo Rides Wii to Huge Profits - Think Wall Street Notices? UserPageVisits:200 active 80 80 DaniWeb 561 60 2008-08-07T20:09:54+00:00

Nintendo Rides Wii to Huge Profits - Think Wall Street Notices?


Here’s a factoid that might interest you.

The one-day record holder for a movie premiere is Spiderman 3, which brought in $59 million in ticket sales on its opening day.

The one-day record for a video game – Grand Theft Auto IV – earned $310 million on its opening day.

Last year, video game sales finally surpassed Hollywood, and is now an $18.8 billion behemoth – a 40% increase from 2006. Studies show that 68% of Americans play video games, and I’m saying that it’s no coincidence that the video game industry has skyrocketed since the launch of Nintendo’s Wii. I was one of those dads with a sleeping bag and a sleepy nine-year-old boy camping out in a Target Store parking lot waiting to be among the first to buy the Wi. It was the first time I’d done anything like that but the look on my son’s face when he got his Wi will stay with me the rest of my life.

As a parent, I’m not huge on video games, but the Wii is different – and that’s why I love Nintendo’s stock (more on that in a moment). Quite simply, the Wi is a revolution in video games and is changing the way people interact with video games, and in a very good way. A study conducted by the University of Wisconsin found that playing sports on Nintendo Wii increases heart rate, boosts maximum oxygen intake - and burns calories. Researchers also found that those playing Nintendo Wii boxing burned about 216 calories in 30 minutes. Those playing Wii tennis burned about 159 calories; baseball, 135; bowling, 117; and golf, 93.

In a nutshell, kids love the Wii and so do parents, which are the ingredients of a perfect storm that should rain billions in profits on Nintendo, making it a long-term Wall Street favorite. Wii sales have jumped 50% since 2007, and total revenue and net income have been up 24% and 34%, respectively. Sure, Sony and Microsoft are fighting back by lowering the prices of their video game consoles, but so what? Nintendo keeps making money hand over fist anyway.

The biggest problem for Nintendo is keeping up with demand. The Wii has been out for almost two years, but Nintendo still has trouble stocking the Wii on store shelves. New features, like the Wii Fit board and the new Wii Music, which will let players simulate more than 60 different instruments, are drawing raves reviews, both in the press and down in my basement.

The future is golden. Nintendo is forecasting sales of the Wii to reach 25 million for the year ending March 2009. It’s also estimating a 26.3% rise in net profits and 7.6% growth in sales for 2008.

Hey, Christmas is only five months away. Give yourself an early present and buy Nintendo’s stock – and if you don’t have one already, buy the Wii. You’ll have the most popular home on the block.

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