I've not invested heavily in this stock for a while. However before people write off the current price they should consider that a) the Wii is selling to a much bigger market than that of traditional consoles and b) It's quite evident that Nintendo's strategy is becoming more akin to Apple's iPod than again "traditional" consoles.
They've just announced the 3rd DS revision. Anyone expecting Nintendo to just ditch that in 2 years and announce a new Gameboy doesn't get it.
Nintendo WILL follow exactly the same strategy with the Wii given it's success. There WILL be new Wii colours, there WILL be a Wii "HD" of some description. If it sells 15m a year for 10 years that's a 150m already.
I don't know whether it will reach those heights but the arguments trying to disprove it that rely on knowledge gleaned from other consoles is much much less likely to apply.
I am not saying I believe the Wii HD article to be true it just drew my attention to the staggering prediction we were making with regards the Wii.
I do think that the Wii is likely to see the first serious product revamp but even taking that out of the equation it will never scale the heights predicted.
Now that Microsoft are making real inroads on price this area is only set to become more competitive.
@welshbloke, - I don't believe this rumor of Wii HD. - I agree that 160 Million is probably on the higher end of GLS prediction. - If the price of Wii GLS go down to below 90 Million, I am going to buy big (90 Million is what I believe Wii GLS will be IF the rumor of Wii HD in 2011 is true)
Posted and article today about the Wii and this was the first time I saw how high this stock has climbed. I honestly have no idea how anybody can expect this stock to sell 160 million plus.
Excuse my rough figures but the Wii has sold approximately 30 million to date over nearly 2 years. To reach the levels predicted it would have to sell this value every year for the next 5 years. This is by no means scientific but it does highlight the phenomenal growth predicted.
My real problem with the Wii is I just see it being replaced sooner than the other 2 and 5 years seems a long time. Please educate me as to why this stock can before this well considering this market is no longer a 1 horse race.
There needs to be a long, hard reality check on this stock. It has been in a steady climb for weeks now and is getting to ridiculous and really ridiculous levels.
@vGInfidel, Like lstormy10 mentioned, 450K for August NPD is NOT the demand leveling off / dropping down, yet, as you suggested. It is the case of supply constrain (I don't understand why Nintendo didn't ship more to US in August).
The sold out status is not as severe as a few months back, in which most Wii stock are sold out within 24 hours of incoming shipment. Nowadays, more store are not sold out until 2-3 days since shipment, whereas some area have stocks that are not sold out until 7 days later.
Even though I didn't live in US, I get those info from internet gaming forum (specifically, NeoGAF).
@vGInfidel, In my suburban community, I haven't seen a Wii since a year and a half ago. In most places in America, the Wii remains pretty much sold out.
However, Nintendo has been reluctant to "ramp up production" because they only do so by increasing productivity at the factories they already have producing the Wii. Nintendo has not really opened many other factories to produce the Wii due to not wanting to have the factories go dormant once the Wii demand decreases. Of course, Nintendo is hoarding some Wii supply for the holidays as they do for every console of theirs each year - because even if the console sells throughout the year, the market is still set to have the greatest demand at the holidays - see last holiday for example.
However, I agree that the rise in this stock has been largely miscalculated and a reality check is needed.
Precisely why im not going to even attempt to short it down to a more reasonable level, my statement was to point out the 40million rise in the last month that has been almost completely unopposed.
And i know no-one has opposed it for precisely the reasons you have mentioned, which gives the stock free run to go ever higher as it is popular and many players on here base, or are at least influenced in, their investments on what they like, not what will make them DKP.
As for the Wii being sold out in America, im not so sure that it is the case now. Only 450k sold last month, i know it was only 27 days, but still when they are supposedly ramping up production that is a low number in Wii terms. Unless they are hoarding units for the coming holiday season, and tbh i see no reason to as they supposedly will sell anyway at any time, im not entirely sure that they are sold out. I dont live in America so its difficult to gain a judgement but i wouldnt rule out a drop in demand.
Ahem. I will not tell you what, IMO, is the right price for Wii GLS, but you need to consider a few things : - Wii selling much better than PS2, so far (I am sure that you can find charts that show it by yourself, but you can ask me for URL if you couldn't find them). - Wii are still in sold-out status in US, right now, almost 2 years after launch. Based on the above mentioned undisputable facts, it is a very risky action to short Wii, even at the "ridiculous" 175 million (or 165 Million at your latest post). Are you going to wait 4 years (like ksparydad mentioned) before getting profit from your short investment ?
Myself, I would rather short some other stock, which can give me faster profit (better ROI). So, unless the price went up to something "even more ridiculous", like 500 Million GLS, I wouldn't waste my precious short margin shorting this stock.
2
The current production is 28 Millions Wii/Year, not 15 ;)
Nintendo is stockpiling a lot of Wii's right now. They are set to have a great Christmas, if the demand is there ;)