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Nintendo Stocks Rise Following PS4 Announcement

PlayStation 4 was just announced on Wednesday. You’d think the excitement for Sony’s future would give its stock performance a bit of a boost after seeing where the games division is headed, right? Guess not – on Thursday, Sony’s shares dropped more than 2%… while Nintendo’s saw a 2% increase.

What does this mean, exactly? Click below for a brief impression.

For those of you who don’t recognize the significance of stock prices: they’re usually a pretty good indicator of where potential shareholders and investors see the company going. If stock prices are falling, it means people are losing confidence in a company’s future (and future profits, which means gains for shareholders); if stock prices are going up, it means people see the company going places and want to put their money in to get a piece of the pie later.

If Sony’s stock is losing value, and Nintendo’s stock is gaining value, that means investors are starting to see more potential in Nintendo than in Sony. It could be that they don’t believe PS4 will perform any better than Wii U has, or it could mean that they’re not impressed by the software lineup – it could mean any number of things.

I tend to think that the presentation has made it clear that Sony is still primarily interested in the same “hardcore gamer” bloc that it captured with PS3 – a very different crowd than the mass market that went after the PlayStation and PS2. If that’s the case, then it’s easy to see why there might be some hesitation: PS3 wiped out virtually all profit Sony made from PS2 – which is still the highest-selling home console ever.

Source: MarketWatch via GoNintendo

  • Gilbert

    To be perfectly frank, stock prices are complete BS. They’re *supposed* to work more or less as you say, but the fact is that they don’t. You can literally cause a stock price to fall simply by starting a stupid (and false) rumor such as “Sony intends to reveal PlayStation 5 in 2014.” It doesn’t matter that it’s an obvious lie, something like that could cause Sony’s stock price to take a dip if you spread it around enough.

    • Alex Plant

      Indeed – but this is a reaction to an actual event, not an Internet rumor.

    • Skyfolk

      Yeah, as Alex said this didn’t happen because of a rumor, this happened because Sony’s event was more disastrous than any of their E3 events.

      • Erimgard

        I wouldn’t call either the Sony presentation or a 2% stock drop “disastrous”

        • Skyfolk

          Are you kidding? The Sony event was hilariously bad. It was by far worse than last year’s Microsoft and Sony E3 conferences put together (and those were bloody awful).

          • Erimgard

            That’s a matter of opinion. Seems to me like the internet’s reaction has been fairly positive overall.

            • Skyfolk

              No, no it hasn’t. If you search the PS4 conference on most sites you will find an overwhelming amount of criticism. It was honestly that bad, objectively bad. They claimed they were gonna get rid of everything that gets between you and the game. Then they showed an assload of features that have nothing to do with gaming, or pull you out of any experience you’re having. It was full of contradictions and guaranteed empty promises, just wait and see.

              • Erimgard

                I’m not saying I expect the PlayStation 4 to be the greatest thing to happen to gaming, but they gave a solid presentation, covered a decent amount of ground, and showed what they have in terms of both unique content and content that can challenge the competition. There were some problems, to be sure, but it blew the E3 presentation right out of the water in my book, and I’ve read hundreds of opinions agreeing. You and I must be visiting different sites ;)

                This coming from someone who has been extremely critical of Sony in the past few years.

  • Daniel WhatThe Heck

    Sony manufactures a lot more than just game consoles. Any one of its other product lines could have caused a drop in stock prices. Also the market has been down lately, and Sony’s sell off could just be in line with current market trends. And its still too early to investors to make a decision since pricing, availability, and the competitors product have not yet been made public.

    • Erimgard

      Obviously Sony has more going for them than just the PlayStation brand, but come on. We know that this was related to that event. There wasn’t any other major Sony news on that day, and over 3 million people watched the event live.

      However, I agree with your assertion that nothing major should be assumed by investors, given that we still know relatively little about the console in terms of being able to make sales projections, and a 2% stock drop isn’t really that out of the ordinary, even on a normal day.

      • Blake Meyers

        I don’t know about you, but while 2% does not sound like a lot in some cases. As a matter of fact, when that 2% involves possibly over ten thousand dollars, you’re hurting pretty bad. I can’t wait to see how far stocks drop when Sony reveals to the public that PS4 won’t be backwards compatable…

        • Erimgard

          It’s not that it’s not “bad”
          It’s that it’s not out of the ordinary. Stocks dip up and down all day long, regardless of major events. And Sony HAS revealed that already. Their President stated it in an interview.

  • zdog

    Didn’t Nintendo’s stock drop after almost every Wii U announcement?

    • Erimgard

      I know it did after at least a couple of their presentations.

      • zdog

        I got curious and went back to double check, Nintendo stock dropped 10.9% in the two days following their 2011 E3 reveal of Wii U. The following year after E3 they dropped 1.8%.I think investors can just be a fickle group of people. But Nintendo has over 800 billion in the bank, I think they calculated that they could take the loss they did last year and still be in business until 2052.

        • Hey

          Thank you for being the most rational and educated person here.

          • zdog

            Thanks, I would say though that the writers here have way better insight into the games industry. They’re commentary is spot on.

  • K2L

    Moral of the story: Don’t make any announcements. They’re dangerous to the economic health.