I wouldn't go long on a peak, but I do consider your points very valid. I happen to believe that we aren't going to see as strong sales as a result of the price drop as we are used to, due to the untraditionally saturated Nintendo market.
Sales leaders usually benefit the least from price drops, especially because the price point of their system was so reasonable. My grandmother already has a Wii....these are the customers who normally take advantage of significant price drops like this one.
I'm not counting the Wii out, but I am certain we will see the Wii2 in late 2011 early 2012. This doesn't give MKWii much time other than in emerging markets. But clearly this price has peaked.
Latest Mar 2010 number for this title directly from Nintendo put sales at 22.55 million. In the last fiscal year it sold over 7 million units world wide. Given the legs that a core Mario game will have I think this is easily viable as a long purchase at current prices. I you are going to buy a 'racing' game for the Wii...what else are you gonna buy?
This stock is a pleasant surprise. It gets released and then keeps gaining with solid growth. I guess people won't stop buying Mario stuff. Sales are starting to drop off a bit but if they maintain 150,000 units sold a month they have a solid hit on their shoulders. Selling 1 million in April 2008 set the bar really high. Who knows Mario kart (wii) will most likely go down as a classic game.
@apujanata, I forgot to mention that MK Wii shipment as of Sept. 30 2008 is 9.53 Million. It seems that Nintendo need to do more shipment for Holiday 08, since this is the first holiday season for US and Europe (it is 2nd holiday season for Japan, since MK Wii is released Oct 07 there). Since this game is still ranked high in UK (within Top 10 every week, IIRC) and US (within Top 10 every NPD month), we might see this game as one of the yearly Top 10.
Possible mistake is your assumption that other countries buy a game in same ratio as UK,maybe they buy more or maybe less of a game than UK ratio assumes.
Latest news from UK told us that Mario Kart Wii has hit 1 Million in UK. Since UK is about 30% of Europe market, it means around 3.3 Million unit sold in Europe. US is almost 3.4 Million, and Japan is 1.8 Million, total = 8.5 Million, in less than 1 year for US & Europe market, and 1 year 1month for Japan market.
IMO, this stock is a little bit underpriced, since current price (15.16 Million) is only twice the current LTD, and Mario Kart was one of those Nintendo games that have long legs. 20 Million should be possible. Any mistake in my calculation ?
@apujanata, Latest news from UK : Wii Fit : #8 Mario Kart Wii : #9
It is clear that even if MK Wii's legs are not as good as Wii Fit in US, they are competing head to head in UK (and probably other Europe country).
Therefore, I believe that MK Wii should have 1.7 Multiplier, which meant GLS should be at least 1620 DKP. This is a pessimistic figure, with optimistic figure at 1.8 Multiplier, or 1715 DKP.
@deftangel, Current LTD vs simEx GLS (before today's changes) : Wii Play : 16,150 vs 30700 : 1.90 Multiplier Wii Fit : 8,760 vs 17180 : 1.96 Multiplier SSBB : 7,470 vs 10400 : 1.39 Multiplier Mario Kart Wii : 9,530 vs 14220 : 1.49 Multiplier
If we use Wii Fit and Wii Play Multiplier, we arrive at 18.679 Million GLS (1867 DKP). Of course, it is possible that MK Wii's multiplier are lower than Wii Fit and Wii Play (doesn't have as good a leg as those 2 games), which is apparent in NPD Top 10 Sep, which have Wii Fit and Wii Play, but NOT MK Wii.
Since Mario Kart Wii have better legs than SSBB, I didn't use SSBB multiplier for it.
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I wouldn't go long on a peak, but I do consider your points very valid. I happen to believe that we aren't going to see as strong sales as a result of the price drop as we are used to, due to the untraditionally saturated Nintendo market.
Sales leaders usually benefit the least from price drops, especially because the price point of their system was so reasonable. My grandmother already has a Wii....these are the customers who normally take advantage of significant price drops like this one.
I'm not counting the Wii out, but I am certain we will see the Wii2 in late 2011 early 2012. This doesn't give MKWii much time other than in emerging markets. But clearly this price has peaked.