Barron's Finds It Is A Depressing Time For Investors in The Video Games Sector
November 02, 2009 8:51 AM
Barron's thinks that if you have invested in the video games sector, commiserations are due. Nintendo Co., Ltd (OTC:NTDOY) slashed its guidance for March 2010 – revenues and profits will be lesser than those in the earlier guidance. The pace of sales in Wii – its games console - is not supporting Nintendo’s yearning to achieve better sales.
Despite a recent 25% price cut, TYO expects a sale of only 20 million units for this console. In its last guidance, it expected a sale of 26 million units. Weak consumer spending and proliferation of low - cost casual games on the Apple’s iPhone are hurting sales of all companies in the video game industry. Besides that, there are no new next - generation game consoles on the horizon. So, investors can expect that their stock in the game publishers and retailers may trade at low multiples for some time.
