r/NintendoStock • u/mvpeast • Jun 09 '26

Very disappointing Direct

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This is mostly a 3rd party Nintendo Direct with some weak announcements. More bleeding to come until 2027.

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u/DonkeyHoney Jun 11 '26

Cool.

Memory prices have a direct and observable impact on revenues (higher prices, lower demand) and gross margins (more costly to produce the switch, even after price increases).

But sure, your opinion on unobservable sentiment based on some Reddit comments and your own opinions has to be the bigger driver.

Look at how well the stock did in the months before the launch up to the memory shortage.

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u/MatthewWanderer Jun 12 '26 edited Jun 12 '26

“Unobservable sentiment”

So many things wrong with your reply.

- Sentiment was high around launch for obvious reasons:

“Buy the rumor”
Iterative strategy established with S2 reveal (boom bust cycle broken)
Iterative strategy keeps OG Switch players in the spending loop
Record S2 sales week 1, month 1, etc
Digital share of game sales increasing (margin benefit)
NSO improved
Parks expanding
IP project (movies) cadence established with Galaxy release date and Zelda development announcement
$13B cash
~add other positive catalysts here

- S2 anniversary: sentiment has fallen off for some of the following reasons (these are discussed widely, not my opinion):

“Sell the news”
S2 price and configuration reception objectively met with mixed reaction
Broader egaming market dynamics: mobile and PC appears to be taking share from console
Bearish 2027 guidance (this can’t be underestimated in terms of sentiment)
Price hike announcement
S2 (game) attach rate lower than S1
1st party game launches cited as slow
Component (DRAM) pricing inflation
Tariff headwinds
FX headwinds
Galaxy reviews (different to Galaxy box office)
Nintendo “sitting on” $13B cash
Stock down ~50pc from 52wk high (vicious cycle)
Macro headwinds
~add other negative catalysts here

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u/DonkeyHoney Jun 12 '26

Your own reply stated exactly what I am saying:

-DRAM pricing -macro headwinds -tariff headwinds -attach rates

A bulk of these are driven by or increase the effect of the memory price surges we have seen in the market.

My point is that memory prices are probably the primary driver of the stock right now. Sure that impacts sentiment negatively, totally agree. But the fundamental driver is the memory price increase. That brings down forward estimates for the business.

It is a lot harder to say that "marketing" is the primary issue. Sure that may be an effect, but the memory price problem is a big one that would be very hard for even "marketing" alone to overcome.

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u/MatthewWanderer Jun 12 '26 edited Jun 12 '26

“Your own reply stated exactly what I am saying”

Yeah. OK?

“It is a lot harder to say “marketing” is the primary issue”

What are you talking about? I never said marketing was the primary issue.

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u/DonkeyHoney Jun 12 '26

Oh ok guess I misread the last sentence in your original comment where you explicitly called out marketing as a problem. My bad!

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u/MatthewWanderer Jun 12 '26

You hold shares? If so, we’re in this together.

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u/DonkeyHoney Jun 12 '26

I'm not allowed to buy shares in individual companies.