One error I want to point out in feelmyring's post is that Wii HW sales for the month of October were 519K, not 819K. While that still makes the 239K Wii Play units sold the lowest monthly attach rate at 46%, it's not nearly as much of an anomaly as 29%.
Wii Play is money making machine, if you think about it. It is the same size as a Wii Mote, and cost maybe 10 cents more to produce. Nintendo is most likley selling it for 8$ more than a Wiimote to retailers. Lets say Nintendo makes 7.5$ for each copy, then for every 10 Million Nintendo is 75 Million $ income. Not bad for a game that cost most likely less than 1 Million to develop. Genius move.
judge_khan's [URL=http://www.thesimexchange.com/community-comment.php?id=7111excellent post about Wii Play from June 15th is, I think, even more true today than it was back then. If anyone is looking for an EXTREMELY undervalued stock, look no further. I'm not going to rehash what he said, because I think everyone interested in this stock should read his comment, but I will provide a little color using NPD numbers from the past 10 months (FEB-NOV). MAR-NOV NPD numbers come from thesimExchange blog page in the monthly recap, FEB comes from [URL=http://www.joystiq.com/2007/03/16/february-npd-data-show-ds-wii-on-top/this Joystiq article.
In the past 10 months, there have been 4,804,000 Wii consoles and 3,033,400 copies of Wii Play sold in the US. The average monthly attach rate is a little over 70%, with a range of 29% in OCT to 110% in FEB. The usual monthly attach rate is somewhere in the 65% range, throwing out the two months over 100% and the one month at 29%.
Here is my data:
Wii Wii PlayMonthly Avg Adj Avg NOV 981000 564000 57.49% 65.14% OCT 819000 239000 29.18% SEP 501000 282000 56.29% Month Avg AUG 404000 256800 63.56% 70.13% JUL 425000 278000 65.41% Actual Attach JUN 382000 293200 76.75% 57.49% MAY 338000 227400 67.28% APR 360000 249000 69.17% MAR 259000 273000 105.41% FEB 335000 371000 110.75%
Total Wii Total Wii Play 4804000 3033400
Now this leads me to believe two things. 1) This stock is incredibly undervalued in relation to the Wii stock, and that; 2) Even if the Wii falls well short of our prediction, this stock is STILL very undervalued.
My estimation is that this stock should be worth AT LEAST 2000 DKP, if not more.
With an attach rate of 57%, this will sell around 60 (6000 DKP) million copies, if the Wii reaches our prediction. I don't think the attach rate will see a substantial reduction, given that this game is the most value effective way to get another controller. Another reason this is a good buy, in my estimation, is that DEC sales should be somewhere in the 700-1100k range (a wide margin, I know). I think this will be a sleeper stock affected by the DEC NPD numbers, and now is an excellent time to get in.
I'm using my NPD totals to extrapolate a lower-end number of what I think the world-wide LTD figures should be. I'm assuming that the US is responsible for 50% of Wii sales, to be on the conservative side. Simply doubling the number so far gives us a little over 6 million units sold in the first year; with possibly as much as another 2 million in December.
In closing, I expect this stock to reach it's current price within 15 months of release, and to sell strongly for as long as the Wii does.
@lstormy10, Right. As long as it keeps selling to a fair percent of Wii owners, it seems like Wii Play should hit the current projections mid next year. Only something like a "Wii Play 2" replacement should prevent it from increasing indefinitely, but what reason is there to believe that's happening?
It should be noted that Wii Play continues to sell fantastic (564,000 copies in November according to the NPD numbers released today) and that as long as it remains the only title bundled with a Wii-mote, it will continue to sell a good number of copies.
People have gotten so used to seeing Wii Play near the top of sales lists (8 months in the top 5 according to below article) that this stock has been slowly trending downwards, when I think it should still be going up. It sold over 300K copies in North America in the 5 weeks of September alone (282K US + 25K Canada). And VGChartz puts LTD WW sales above 6 million.
LTD WW sales will probably jump up to 8-9M during the holidays. As people see LTD sales within several million of the projection, this stock will start to climb again.
While not many people talk about group sessions of Wii Play at senior centers, it's been in the top five selling games for the last eight months straight.
3
And I thought I checked it so well... Good catch!