You missed the point of my post entirely. I'm in full agreement that this game will continue to sell extremely well. Earlier in this post, people were projecting lifetime sales of this games, and assumed the current attach rate would remain the same throughout the entire lifetime of the Wii. I was merely suggesting that the stock could be skewered by any number of thigns, all of which would immediately cause this stock to plummet. The value of this stock is in the controller, not the game, and thrives on being the only game to come with a controller. However, no new news about any similar game coming out is definitely a good sign for this stocks future. That said, I still think it's extremely naive to think that the attach rate this game has had, will continue throughout the lifetime of the Wii.
@SERAPHRowen, Would you rather have a controller or a Controller & a free game? Personally, i would rather have something free with my controller, regardless if it was a crap game. A free crap game is still a FREE crap GAME.
Burger king games are practically free with a value meal and they sold millions of those games.
America and especially americas youth love FREE things. FREE will perk up the ears of any american to see if they want it or not. Not sure about the rest of the world.
I just dont get how you can argue that a controller with a free game is better than just a controller. Personally, i would buy 4 and give the games to my friends or sell them on ebay for a couple of bucks.
Well, E3 brought no news so far that suggests Wii Play might be followed up by some another game with Wiimote pack in anytime soon, so it is pretty much 100% certain this game will keep selling at a high rate all of 2007. Since it is currently around 4M already, selling between 6-8M at the end of the year seems to be a certainty. Then including the upward potential for the years after 2007 means this game is way undervalued at the moment, and I personally think this game should be 10M expected lifetime WW sales at the moment.
I don't know why many traders here doubt that this game will continue to sell. The game is only $5 if you think about it. People who are going to buy this console will want a controller so they can play both 'casual' and 'hardcore' multiplayer games. As long as there is no announcement of Wii Play 2 (unlikely) or a controller bundled with a game like Smash Bros. (also unlikely), there really is no place for this stock to go but up.
I'd like to put in my $0.02 as to why Nintendo won't be releasing Wii Play 2 any time soon. It's because Wii Play is still making money... and lots of it.
In Japan, Wii Play is constantly in the top 10, much like Wii Sports. Check the latest Media Create sales charts, they are 9th and 5th respectively last week. While other Wii games come and go, these two stay in there hanging onto their spots. It's a similar situation in the US. NPD has Wii Play at 5th in May, 6 months after its release. Wii Sports, as we know, is included. In Europe, it's 5th in Britain and 3rd in Spain last week.
Releasing Wii Play 2 is suicidal. Those who have Wii Play is unlikely to get it because they already have an extra controller (which was their main reason to buy Wii Play in the first place). Sure, Nintendo can release the game in 2 versions, one with and one without controller, but the games ain't that great to start with. So those who already have Wii Play is unlikely to pick it up. Besides, they won't be the reason why this stock would fall.
Those who would affect this stock are those who haven't got an extra controller yet. But why release Wii Play 2 when Wii Play is still doing exceptionally well in the market place? Gamers are still buying it in the truckload. Releasing Wii Play 2 would cut off the Wii Play revenue.
If Nintendo were to release Wii Play 2, it will require development cost (doing stuff at lunch time still cost money), marketing cost (people need to know Wii Play 2 is out there), package desgin (needs to make Wii Play 2 looks different), etc. If I were a business, and my product is making a lot of money, I see no reason to release a similar product that could jeopardise my original product. iPod is different because it continues to improve the performance and appearance of the product. In the case of Wiimote, you don't.
That said, I'm not saying Nintendo won't make Wii Play 2. What I am saying is, Nintendo won't release Wii Play 2 until Wii Play 'dries up'. The dilemma is, if Wii Play dries up, it can only mean one thing, gamers are getting controllers elsewhere. And as far as this stock is concerned, that's the end of it.
SERAPHRowen has suggested that a competing game with a controller attached will cause this stock to fall. That is true, but what kind of game would have a controller attached? A multiplayer game, of course. A one player game wouldn't need an extra controller, would it? Nintendo is unlikely to release a game with a controller attached due to the continuous high sales of Wii Play. And if they did, they would have to release the game in 2 versions, one with and one without. If the game is immensely popular, then yes, it will cause this stock to fall, at least in the short term.
Any third party games that need two players? Of course there are, but remember, the third party will probably have to pay Nintendo license fee to package a controller with their game, which will increase their cost, thus increase the price of the game. Those who already have 2 controllers would think twice about getting the game. Of course, we're assuming Nintendo would let them compete with Wii Play in the first place. And again, the game will have to be released in 2 versions to cater for those who already have the controllers, and those who don't.
Next, the price of the controller drops. This is the most likely scenario. A price drop will certainly make gamers think about whether the extra money for crappy games is worth it. In the short term, I don't see the price of controller dropping. If Nintendo is smart, they would reduce the price of Wii Play as well if/when they drop the price of controller.
In essence, Wii Play is NOT a game that comes with a controller. It's a controller that comes with a game. If you understand that, you will know why Wii Play will continue to sell.
So after all the crap that I have said, where does that leave us? Overvalued? Undervalued? Just right? I think it's undervalued in the absence of any news/hints/rumours that controllers will be included in any other games. Sales of Wii is certainly very strong at the moment. Sales continue to be strong for this game throughout the world. 3.5M worldwide in 6 months for 8M Wiis sold is quite a feat, and the momentum is not abating. If it continues to sell like it is now, it would hit 6M in less 6 months.
I'm not arguing that the game won't meet it's current estimated sales. I think it's likely it will hit six million.
What I'm arguing against, and I think what charron is arguing against, is the assumption that the sales this game has enjoyed will continue throughout the lifetime of the Wii, when essentially the game is crap, and is thrown in with a controller.
I think when you said "valued at less than half its current sales" you meant "twice its current sales"."""
Oops, yeah. Thanks for catching that.
Anyways... The more time passes without hearing a peep about a Wii Play replacement, competitor or sequel, the higher this stock should go. Nintendo are aiming to sell 20 million Wiis by March 2008, at which point Wii Play could have sold 8 million; if something isn't announced by E3, it likely isn't coming out in that time period.
I'd also like to respond to the statement "To naively assume that the attach rate will continue for the entire lifetime of this stock, I feel, is a big mistake." Actually, I said 30 million units on 100 million Wiis, or 30% as a high end, and 12 million units on 50 million Wiis, or 24%, as a low end. **The current attach rate is 44%.** In Japan, the attach rate is dropping, and could slip below 50% LTD in the next few months. In America, the LTD attach rate is still rising after the late release, up to 38.5%, and will go higher before it goes lower. Regardless, my expectations include a dropping attach rate. (All numbers derived from VGChartz.)
Some other concerns that were mentioned I just disregard completely. For example, if the price of a controller drops, the price of Wii Play will drop along with it. When Nintendo releases new controller colors, they'd be smart to make certain colors exclusive to Wii Play, to boost sales of the higher profit SKU. Etc. The valid concerns lie in that Nintendo could release a replacement, competitor or sequel to the game, but once again, it will need to be announced soon (or released suddenly), for Wii Play to actually sell LESS than 6 million.
The problem isn't even neccesarily if a Wii Play 2 comes out. The thrust of the problem is the value of this stock is directly associated with the value of the controller, not the game itself. Compounded by the fact that this stock is for lifetime sales. Any number of things could cause this stock to plummet.
Consider any of the following scenarios:
- A sequel is released. - A competing game with a controller attached is released. - The price of the controller drops.
Any of these things could have a huge impact on the future of this stock. To naively assume that the attach rate will continue for the entire lifetime of this stock, I feel, is a big mistake.
To me, it's not a matter of if this stock will crash, but when. If it's soon, this stock will plummet. The longer it goes, the safer your investment will be, as the sales have already been done.
I think there's a bit of hesitation over what's considered an inevitable Wii Play 2. I understand your argument for why no sequel could happen, but I think Nintendo is wise enough to throw together some other tech demos that someone created on their lunch break and sell that. Minimal effort, and everyone who bought Wii Play is now part of the Wii Play 2 market again, so it leads to more sales potential. If this is the only Wii Play, then it'll absolutely break through to tens of millions. My thought is, if a second, better Wii Play arrives, this one may get dropped by the wayside immediately. I do have a position in this, and I do think it's undervalued, but my position's smaller than it could be because I'm honestly expecting a sequel to eat up a lot of the sales you're anticipating.
-1
You missed the point of my post entirely. I'm in full agreement that this game will continue to sell extremely well. Earlier in this post, people were projecting lifetime sales of this games, and assumed the current attach rate would remain the same throughout the entire lifetime of the Wii. I was merely suggesting that the stock could be skewered by any number of thigns, all of which would immediately cause this stock to plummet. The value of this stock is in the controller, not the game, and thrives on being the only game to come with a controller. However, no new news about any similar game coming out is definitely a good sign for this stocks future. That said, I still think it's extremely naive to think that the attach rate this game has had, will continue throughout the lifetime of the Wii.