Nintendo Stocks See Second Day of Decline on Wii U News

Nintendo has suffered its second substantial drop in its stock price just days after its E3 press conference where it announced the Wii U console and controller. On Wednesday the company saw a 5.7 drop in its stock price and today it dipped an additional 5.2 percent (as of this writing). The consecutive declines for the Japanese console maker came after the company announced its new console, but the exact cause is up for interpretation, according to one Japanese financial analyst.

According to Mitsushige Akino, a chief fund manager at Ichiyoshi Investment Management, the decline has more to do with a perceived shift in the broader videogame universe.

“The product itself is not bad–market expectations had been far too high,” Akino told the Wall Street Journal. “..it is also a reflection of structural issues caused by a transformation within the market.”

Akino went on to say that Nintendo faces a different consumer landscape than when it launched the Wii, which attracted a lot of casual gamers. Many of those same gamers now prefer to play online games that don’t require a console, he claims.

But the truth is that Nintendo’s messaging for Wii U was flawed, convoluted and confusing. The company interchanged the terms “controller” and “console” during its presentation, leaving even experts in the media confused about what the Wii U was supposed to be. Eventually Nintendo clarified the message, saying that Wii U was in fact a new console, but said that it didn’t like to throw around specs.

Unfortunately for them, consumers, the media, and investors like technical specs because they enjoy clarity. And in the case of Wii U, those specifications could have cleared up the confusion about whether it was simply a new add-on for Nintendo’s existing system or a full-blown console.

Luckily, Nintendo partners IBM and AMD have helped reveal some of the technology powering Wii U, but those details may have eluded jittery investors.

Thanks to Andrew Eisen for the tip.

source: WSJ

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