Quick Stock Overview

Ticker: NTDOY

Source: www.stockrover.com

Key Data

• Sector: Communication Service

• Sales ($M): 15,962

• Industry: Electronic gaming and multimedia

• Net Cash per share: 16.46

• Market Capitalization ($M): 54,557

• Equity per share: $17.84

• Employees: 6,574

• P/E: 12.5

Investment Thesis

The Hidden (Investment) Gem of The Gaming Industry

Video games have slowly evolved from kids’ entertainment to a large part of the culture. This mostly followed the first generations of gamers getting older and now having families of their own. This was especially visible after a year of lockdowns, with plenty of time to play at home. The gaming industry revenues were up to $159B in 2020, a 9.3% year-to-year growth.

Most of the industry news is dominated by blockbuster AAA games and headlines about the comparative performance of the latest consoles or PC hardware. Deeply rooted in the industry since its inception, the arms race for bigger virtual worlds, better graphics, more complex games is still ongoing.

Gaming is a highly challenging industry, where yesterday’s winners can be outpaced by their competitor’s technical innovations. The sector is littered with the leftover of former industry leaders: Atari, Commodore, Sega, Westwood studio, etc… And were bigger, quicker, and prettier = better.

It is also a field where hardware manufacturers like Sony (PlayStation) and Microsoft (Xbox) subcontract the costly and risky process of game development to third parties. These developers and publishers enjoy the ability to publish their games to all platforms technically able to support them, broadening their market.

But there is one company defying the odds and industry best-practice, betting on cheaper, lower performance hardware. It is also developing almost all its key games internally and outright refusing most third-party developers to use their consoles.

This company is, of course, Nintendo.