$NTDOY Flying Under The Radar
The Super Mario Bros. movie broke the $1 billion mark, becoming the highest-grossing video game movie. Nintendo Co., Ltd. (OTCPK: NTDOY) can expect to increase its IP-related income for FY2024, especially with the opening of Super Nintendo World in Los Angeles in collaboration with Comcast (NASDAQ: CMCSA). Moreover, NTDOY released Tears of the Kingdom, the sequel to the fan favorite Breath of the Wild which can drive NTDOY’s revenues in FY2024 which in turn can reflect on NTDOY stock. On another note, there is a lot of speculation that the next generation Switch will be launched in 2024 since sales of the Nintendo Switch have been declining lately. Given all of these catalysts, NTDOY stock could be a profitable long-term investment.
NTDOY Fundamentals
Video Game Market
The video game market is currently reflecting the economic climate since video game sales have continued to decline – falling 5% to $4.1 billion from last March’s $4.3 billion and 2% YoY, according to research group Circana. Furthermore, NTDOY’s Switch sales dropped 22% YoY from 22 million units in FY 2022 to 18 million units in FY 2023 which shouldn’t be a cause for concern since it has been 7 years since the Switch’s release. NTDOY also announced that it has sold 210 million software units, down 8% from the 230 units it sold last year, which can be attributed to the lack of flagship titles released last year.
It is also worth noting that NTDOY is expected to launch the next generation of the Switch in 2024, which could drive hardware sales since the Switch is 7 years old as of now, and NTDOY fans are eager for its update.
New Releases
Unlike last year, this year seems to be loaded on the flagship release front NTDOY has released the new Zelda game Tears of the Kingdom, which sold 10 million copies over the first three days, even though the new game was $10 more expensive than Breath of the Wild. That indicates that demand for flagship games is still there even with higher prices, despite declining video game sales this year.
Monetizing Its IP
Not only did NTDOY succeed in the video game, but the collaboration with Comcast on its new movie, The Super Mario Bros., was a huge success and exceeded all expectations. The Super Mario Bros. is currently the highest-grossing video game-based movie at $1.3 billion worldwide and is on the path to becoming the highest-grossing animation movie.
While this is great news for Nintendo, what is more important is that the movie may increase interest in Mario games and have a positive effect on the Switch and software sales in the medium to long term. In fact, NTDOY has seen sales growth for Mario-related merchandise and a slight rise in activity for classic Mario titles.
The success of The Super Mario Bros. movie can open the door to more movies based on NTDOY’s IP in the future, especially with the rumors that Universal closed a deal with NTDOY for a future Legend of Zelda movie. Thus, it indicates that NTDOY is now more willing to use its IP.
Comcast’s Universal Studio is another place NTDOY is willing to use its IP since Comcast opened Super Nintendo World in its Universal Studios theme park in Los Angeles, which will increase NTDOY IP revenues, especially as the summer season begins, which accounts for more than 40% of theme park annual revenues.
Comcast will also bring the Super Nintendo World to its Universal Studios theme park in Singapore in 2025. Furthermore, Comcast is currently working on the construction of Universal Epic Universe in Orlando, Florida which is expected to be finished by 2025 and confirmed that it will have a Super Nintendo World themed area. With the company expanding the range of its IP’s uses, NTDOY stock appears to be well-positioned to increase in value in the long term as these endeavors bear their fruit.
NTDOY Financials
In its 2023 annual report, NTDOY’s assets increased 6% QoQ from $19 billion to $20.3 billion, and its cash and cash equivalents in Imperial Petroleum Inc. (NASDAQ: IMPP)creased 4% QoQ from $8.6 billion to $9 billion. NTDOY’s total liabilities slightly decreased from $4.23 billion to $4.2 million.
Revenue also decreased 6% YoY from $12.1 billion to 11.4 billion. Operating costs increased almost 8% from $2.5 billion to $2.7 billion, which contributed to the operating income decrease of 14% YoY from $4.2 million to $3.6 million, which amounted to a net income of $3 billion – a 12% decrease YoY.
*These numbers have been converted from Japanese Yen to US Dollars using June 14, 2023 prices.
Technical Analysis
NTDOY stock’s trend is bullish with the stock trading in an upwards channel. Looking at the indicators, the stock is trading above the 200 and 50 MAs which are bullish indications, and is retesting its 21 MA support. Meanwhile, the RSI is overbought at 74 and the MACD is approaching a bearish crossover.
As for the fundamentals, NTDOY stock just witnessed a catalyst in the release of the new Zelda game Tears of the Kingdom. NTDOY’s Q1 earnings on August 3 will be an important future catalyst as it will show NTDOY’s revenues from its Zelda game and Super Nintendo World.
NTDOY Forecast
The video game market seems to be slowing down after it exploded back in the pandemic. NTDOY is currently seeing some of that since its software unit sales have declined in FY2023 and NTDOY expects the decline to continue in FY2024. But with NTDOY expanding its IP exposure with the new The Super Mario Bros. movie and Super Nintendo World in collaboration with Comcast NTDOY can expect to realize more IP-related revenue in FY2024.
Furthermore, NTDOY released the much-anticipated Zelda game Tears of the Kingdom, which sold 10 million copies in the first 3 days despite the market slowing down. NTDOY stock is a stock to keep an eye on, especially with the expectation that NTDOY is going to release the next generation of the Switch soon.
NTDOY Fundamentals
Video Game Market
The video game market is currently reflecting the economic climate since video game sales have continued to decline – falling 5% to $4.1 billion from last March’s $4.3 billion and 2% YoY, according to research group Circana. Furthermore, NTDOY’s Switch sales dropped 22% YoY from 22 million units in FY 2022 to 18 million units in FY 2023 which shouldn’t be a cause for concern since it has been 7 years since the Switch’s release. NTDOY also announced that it has sold 210 million software units, down 8% from the 230 units it sold last year, which can be attributed to the lack of flagship titles released last year.
It is also worth noting that NTDOY is expected to launch the next generation of the Switch in 2024, which could drive hardware sales since the Switch is 7 years old as of now, and NTDOY fans are eager for its update.
New Releases
Unlike last year, this year seems to be loaded on the flagship release front NTDOY has released the new Zelda game Tears of the Kingdom, which sold 10 million copies over the first three days, even though the new game was $10 more expensive than Breath of the Wild. That indicates that demand for flagship games is still there even with higher prices, despite declining video game sales this year.
Monetizing Its IP
Not only did NTDOY succeed in the video game, but the collaboration with Comcast on its new movie, The Super Mario Bros., was a huge success and exceeded all expectations. The Super Mario Bros. is currently the highest-grossing video game-based movie at $1.3 billion worldwide and is on the path to becoming the highest-grossing animation movie.
While this is great news for Nintendo, what is more important is that the movie may increase interest in Mario games and have a positive effect on the Switch and software sales in the medium to long term. In fact, NTDOY has seen sales growth for Mario-related merchandise and a slight rise in activity for classic Mario titles.
The success of The Super Mario Bros. movie can open the door to more movies based on NTDOY’s IP in the future, especially with the rumors that Universal closed a deal with NTDOY for a future Legend of Zelda movie. Thus, it indicates that NTDOY is now more willing to use its IP.
Comcast’s Universal Studio is another place NTDOY is willing to use its IP since Comcast opened Super Nintendo World in its Universal Studios theme park in Los Angeles, which will increase NTDOY IP revenues, especially as the summer season begins, which accounts for more than 40% of theme park annual revenues.
Comcast will also bring the Super Nintendo World to its Universal Studios theme park in Singapore in 2025. Furthermore, Comcast is currently working on the construction of Universal Epic Universe in Orlando, Florida which is expected to be finished by 2025 and confirmed that it will have a Super Nintendo World themed area. With the company expanding the range of its IP’s uses, NTDOY stock appears to be well-positioned to increase in value in the long term as these endeavors bear their fruit.
NTDOY Financials
In its 2023 annual report, NTDOY’s assets increased 6% QoQ from $19 billion to $20.3 billion, and its cash and cash equivalents in Imperial Petroleum Inc. (NASDAQ: IMPP)creased 4% QoQ from $8.6 billion to $9 billion. NTDOY’s total liabilities slightly decreased from $4.23 billion to $4.2 million.
Revenue also decreased 6% YoY from $12.1 billion to 11.4 billion. Operating costs increased almost 8% from $2.5 billion to $2.7 billion, which contributed to the operating income decrease of 14% YoY from $4.2 million to $3.6 million, which amounted to a net income of $3 billion – a 12% decrease YoY.
*These numbers have been converted from Japanese Yen to US Dollars using June 14, 2023 prices.
Technical Analysis
NTDOY stock’s trend is bullish with the stock trading in an upwards channel. Looking at the indicators, the stock is trading above the 200 and 50 MAs which are bullish indications, and is retesting its 21 MA support. Meanwhile, the RSI is overbought at 74 and the MACD is approaching a bearish crossover.
As for the fundamentals, NTDOY stock just witnessed a catalyst in the release of the new Zelda game Tears of the Kingdom. NTDOY’s Q1 earnings on August 3 will be an important future catalyst as it will show NTDOY’s revenues from its Zelda game and Super Nintendo World.
NTDOY Forecast
The video game market seems to be slowing down after it exploded back in the pandemic. NTDOY is currently seeing some of that since its software unit sales have declined in FY2023 and NTDOY expects the decline to continue in FY2024. But with NTDOY expanding its IP exposure with the new The Super Mario Bros. movie and Super Nintendo World in collaboration with Comcast NTDOY can expect to realize more IP-related revenue in FY2024.
Furthermore, NTDOY released the much-anticipated Zelda game Tears of the Kingdom, which sold 10 million copies in the first 3 days despite the market slowing down. NTDOY stock is a stock to keep an eye on, especially with the expectation that NTDOY is going to release the next generation of the Switch soon.
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