Friday, July 13, 2007

Black Swan: Nintendo Wii could top record-holding PS2

The success of Nintendo Wii is a "Black Swan" from my own perspective. I didn't expect that Wii could be so successful, out-selling both PS3 and XBox 360. Maybe some of you have expected that, but humbly, I have to admit that I didn't.


Learning point:

Technology companies are subjected to extreme and fast changes and "Black Swan" events are happening all the time. However, they are very difficult to predict and the extent of the impact would be massive.

Therefore, it would be extremely but not impossible to value a fast-changing technology companies i.e. Nintendo, Sony, etc.

Warren Buffett likes stable and easily predictable companies i.e. Coca Cola as he could project 10 to 20 years out. Other great investors like Glenn Greenberg, Tom Russo, Li Lu, Bill Nygren, Whitney Tilson, Marty Whitman and others are among members of this camp.

For ordinary investors, it is better to stick to "one-foot hurdle" than "10-foot-hurdle". Great investors like Bill Miller and Eddie Lampert, who are successful in dealing with "10-foot-hurdle" problems, are rare.


Sales of Nintendo's quirky Wii video game machine could top the legendary PlayStation 2, making it the biggest hit in the industry's history, Nintendo President Satoru Iwata said on Thursday.

Nintendo Co. Ltd. sped past Sony Corp. in market capitalization last month to become one of the 10 most valuable companies in Japan.

Full Article


K said...

Hi David,

How are you? It's KY. I'm back from Japan. Nintendo Wii has the intriguing new concept of motion sensor play-mode. I think that's why everyone's keen on trying it (especially at the half price of PS3). However, whether it will flourish in the future is another matter as the graphic is not as impressive and some people may find it not ideal to play some games with the motion sensor.

Dah Hui Lau said...

Hi KY,

Thanks for your comments. Hope your Japan trip was good. We shall meet up again soon.