No, you're not surprised. Nintendo (OTC: NTDOY) moved the most video-game consoles in the U.S. in July. According to this Bloomberg article, which cites monthly data supplied by market-research firm NPD, gamers purchased over 550,000 Wii systems. Sony's (NYSE: SNE) PlayStation 3 was snapped up by almost 225,000 players, and Microsoft's (NASDAQ: MSFT) Xbox 360 sold about 205,000 units.
There's no question about it now -- the Wii should dominate the holiday season. Momentum is behind the company's strategy of creating products that appeal to casual gamers. I'd be shocked if the fad all of a sudden burned itself out, although Douglas McIntyre did write recently about the possibility of Nintendo running out of steam at some point. The Wii Fit exercise system was the second best-selling software title in July. That property is definitely helping drive Nintendo's fortunes.
In other software statistics, Electronic Arts (NASDAQ: ERTS) was number one with NCAA Football '09. Activision Blizzard (NASDAQ: ATVI) came in third with its version of Guitar Hero for the Nintendo DS handheld unit. EA should come out on top again next month since the new iteration of its Madden franchise came out earlier this week. There was a lot of excitement over that game, as there traditionally is every summer.
In terms of investment ideas, I think Activision Blizzard is still the one to look at. Buying EA now might be a little late, at least from a short-term trading perspective as the stock was up about 9% in the last month. So, if one wanted to get in on the Madden buzz, it could be dicey at this point. Would have been better to buy a month ago, I suppose.
Nintendo's share price, however, is something that needs to be followed carefully. It dropped over 2% on Thursday to close at $59.60. I do like this stock under $60. If we get another pullback, and if you have been thinking about the company's ADRs, you may want to take a serious look. The holidays will be here sooner than we all think, and with it will come a lot of headline news regarding Nintendo. Not only is it probably a good longer-term vehicle, but it probably will offer many trading opportunities.
Disclosure: I own Activision Blizzard; positions can change at any time.
