Nintendo Stock Prediction: Strong Demand For Switch Is Boosting Nintendo’s Stock

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First

NTDOY Stock Prediction


  • Nintendo’s stock rose +45% since the March launch of its latest gaming console, the Switch.
  • The Switch sold 2.74 million units in its first month. The strong demand for this hybrid portable/dockable console is causing a global short-supply problem.
  • Nintendo just announced today that it is increasing its production order to ease the short-supply plaguing Switch.
  • I expect Nintendo to sell 20 million units of the Switch during its first year run. This unique product has the backing of almost all game publishers and developers.
  • NTDOY has positive market trend algorithmic forecasts from I Know First.

Nintendo’s (NTDOY) stock is trading at an 8-year high but I believe it still has upside potential. NTDOY’s price has shot up by +45% since the March launch of its latest gaming console, the Switch. The global demand for this portable/dockable gaming console is just snowballing. Investors will likely push NTDOY higher because the incredibly strong demand for Switch has compelled Nintendo to again increase its production.

A new escalation in Switch production means there really is a big surge in demand. A steady growth in Switch sales could further boost NTDOY’s stock beyond the $45 price level. The more units of Switch that is sold, the more game developers will back it up.

Nintendo Stock Prediction

(Source: Google Finance)

Why Investors Should Care

Nintendo already doubled-up its production order for the Switch last March. And yet there is still a global short-supply problem. Nintendo admitted last April that it grossly underestimated the demand for Switch. Nintendo sold 2.74 million units of the Switch in March. The company originally expected to sell 13 million units by April 2018. However, based on Nintendo’s new increase in production order, I expect the Switch to hit the 20 million sales mark.

The longevity of the Switch depends on how many units it sells. Game developers and publishers want a large pool of customers for their games. They won’t be porting their hit PC, Xbox, and PlayStation games to the Switch platform if they do not see enough user base.

A long list of game developers and publishers committed to the Switch. However, commitments or promises are made to be broken. It is therefore great to see the Switch selling so well that it is often out of stock. The gaming industry-related companies found at the chart below will have no choice but to create games for the Switch. It’s a new platform that’s attracting many gamers. Game developers and publishers flock to where gamers are going.

(Source: Nintendo)

The early success of the Switch has inspired developers to create a long list of upcoming games for it. Nintendo’s decision to offer subscription-based service on the Switch is also attractive to game developers. Microsoft’s (MSFT) Xbox and Sony’s (SNE) PlayStation Network offer subscription plans too. Publishers and developers prefer the subscription-based system because it minimizes the impact of piracy. The recurring revenue from monthly subscriptions assures developers a steady income.

Nintendo’s Software Empire Also Benefits

The Switch is also a new vehicle where Nintendo’s library of games could be monetized again. Selling the hardware is just a prelude to making money. The Switch is the bait and hook bored users of Wii and Wii consoles. Once hooked, they will again buy their favorite Nintendo games on the Switch platform.

In terms of software/game revenue, console gamers are the second-biggest customers. There are a larger number of PC gamers. However, console players generate more revenue – $29.4 billion from PC and $33.5 billion from console. Nintendo’s classic games like Pokemon, Super Mario, and Donkey Kong can found new customers again on the Switch platform. On the Switch platform, Nintendo sold 2.76 million copies of its $49.99 The Legend of Zelda: Breathe of the Wild last March. The razor-and-blade concept definitely applies to the Switch. Nintendo makes more money on games.

(Source: Newzoo)


The unique design of the Switch, which allows people to play it like handheld or as a regular game console attached to a TV, ensures its commercial longevity. There is no other product like it right now. Microsoft and Sony have not announced they too will create a hybrid portable/dockable console.

I rate NTDOY as a Buy. Ever since the GameBoy and the Wii, Nintendo has proven it can make groundbreaking products that become successful in the market. The Switch is a disruptor like the first Wii or GameBoy. People have embraced new ideas from Nintendo before, they are again going gaga over the Switch.

Nintendo’s stock touts positive algorithmic forecasts. They are hinting it is time go long on NTDOY.



I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.

Past I Know First Success With NTDOY

I Know First has been maintaining its bullish forecast of Nintendo, such as its bullish article published on November 10, 2016. Pokemon Go has become a financial success for Nintendo. Realizing the potential in mobile games, Nintendo has been focusing its effort into this segment. In addition to Pokemon Go, Super Mario Run has also been released. Since the article’s release, Nintendo’s stock has increased by 30.43%.

(Source: Google Finance)

This bullish forecast for NTDOY was sent to I Know First subscribers on November 10, 2016. To subscribe today click here.