Market Overview

This Big Fund Manager Is Betting On Nintendo In The Video Game Console Wars

This Big Fund Manager Is Betting On Nintendo In The Video Game Console Wars

One of the big trends in the gaming world is the highly anticipated launches of new consoles from Microsoft Corporation (NASDAQ: MSFT) and Sony Corporation (NYSE: SNE). Investors won’t find either of those stocks in the Ark Innovation ETF (NYSE: ARKK), as manager Cathie Wood has opted to add shares of another classic instead.

What Happened: Wood has been buying shares of Nintendo Co. (Pink: NTDOY) dating back to October.

The ETF manager added more shares of Nintendo in all five trading days last week, buying nearly 671,000 shares of Nintendo. The gaming company represents 1.1% of the fund’s assets.

The Ark Innovation ETF is one of the top-performing funds of the year, up 99%.

Related Link: Pokemon Go Having Best Year Ever: Why Investors Should Watch Nintendo's Stock

Why It’s Important: Nintendo has seen success in 2020 and Wood could be betting the trend continues even with new consoles.

The Nintendo Switch was the best selling console in October with nearly 736,000 devices sold in the U.S. October was the best month for sales of the Switch since its release in 2017.

The Nintendo Switch has topped the console bestselling list for 23 consecutive months and sold more than 22.5 million units in the U.S. and 63 million worldwide.

In October, Nintendo had four games among the bestselling 11 according to NPD data. “Mario Kart Live: Home Circuit” ranked fifth in October despite a $200 price for its bundle of the game and AR-powered car.

Sony's Playstation 5 is seeing huge demand and is selling out at key retailers during its release. The new consoles from Sony and Microsoft will likely bump the Switch from its long-standing place on the best sellers list.

A bet on Nintendo could be a bet on the growth of the overall video game market and software sales.

NTDOY Price Action: Nintendo's stock is up 31% year-to-date, trading around $64 per share.


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