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Read Nintendo's stance on anti-takeover measures before you start speculating on acquisition deals

Think today's Activision Blizzard deal with Microsoft means Nintendo is about to be acquired? Think again.

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Today's big story about Activision Blizzard being acquired by Microsoft has many people speculating on other potential deals. Before you post your latest hot takes about Nintendo getting scooped up in a merger or acquisition, you might want to check out the company's most recent statement on "Anti-Takeover Measures." Please take a look.


Here is an excerpt from the latest Corporate Governance Report posted to Nintendo's Investor Relations page:

The Company's Board of Directors believes that the decision of whether to accept another party's tender or other acquisition offer for the purpose of making large purchases of the Company's stock ultimately should be entrusted to its shareholders, given that the stock of the Company, which is a public company, is freely traded.

However, as it is possible that certain tender or acquisition offers may harm the Company's corporate value or the common interests of shareholders, depending on the intent of the offer, etc., the Company's Board of Directors maintains that such offers are inappropriate. As of now, any specific defensive measure in the event of a tender or acquisition offer has not yet officially been introduced, but the Company has already set up and internal system to deal with such an event. If a tender or acquisition offer is proposed, the Company will carefully judge its potential impact on its corporate value and the common interests of shareholders, and take appropriate measures as management's clear duty of diligence to all shareholders.

Specifically, in addition to evaluating the offer with outside experts and negotiating with the party making the offer, the Company will establish a group to determine whether specific defensive measures are necessary, decide their contents, and implement them. If the offer is deemed inimical to the Company's corporate value or common interests of its shareholders, the defensive measures will be determined and implemented in accordance with relevant laws and regulations. The Company will continue to consider adoption of any defensive measures for these situations, giving due respect to laws, regulations and case law related to acquisitions, their interpretations by relevant authorities, etc.


This update from Nintendo was posted to their investor relations website back in November 2021, but it seems like a nice time to remind folks out there speculating about the next big video game deal. It appears that Nintendo is more open to acquisitions than ever before, and they are putting the decision into the hands of shareholders more. This is a break from how things operated at the Big N when the founding Yamuchi family held a 10% stake in the company's stock. 

Nintendo has proudly stood as an independent company since being founded in 1889, making an acquisition unlikely.
Shacknews inducted the late Nintendo President Hiroshi Yamauchi to our Hall of Fame just last year.

While Nintendo is not completely opposed to a deal, the statement from their recent Corporate Governance Report indicates a huge amount of reticence on the Board of Directors surrounding an acquisition. The timing of that statement is interesting, as Nintendo has been propositioned in the past by companies like Microsoft. One could speculate that Nintendo has an even bigger target on their back following today's news of Acitivision Blizzard being scooped up by Microsoft for nearly $70 billion in cash, but there are a lot of hoops that would need to be to bag a deal with Nintendo.

Nintendo has been able to stay independent since its founding in 1889, and it appears that they are still focused on doing their own thing. Only time will tell if some technology behemoth like Apple, Google, or Amazon will make a bigger move into the video game industry, and Nintendo would certainly be a crown jewel with an unrivaled treasure trove of intellectual property.


This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

Full Disclosure: At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, and his company Virtue LLC had the following positions:

Long Nintendo via NTDOY shares

Luminary

Asif Khan is the Luminary and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

From The Chatty
    • reply
      January 18, 2022 11:50 AM

      I don't read that as them being more open; that language to me seems aimed at avoiding minority shareholder complaints.

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      January 18, 2022 12:14 PM

      I dont want nintendo to get taken over. I like that they are there own unique thing.

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        January 18, 2022 3:06 PM

        I don't like that any console makers are buying third-party publishers.

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      January 18, 2022 1:16 PM

      This is Me when I think of MS products running Nintendo games https://www.youtube.com/watch?v=z-BkrwO_Dck :) .

      As long as Nintendo announces the Switch 2 at E3 and release it for Holiday 2022 I will stop dreaming of Nintendo software running on Windows and the XBSX. During the 24th Annual Needham Growth Conference NVIDIA's CFO(Colette Kress) said " I reaffirmed that the ongoing GPU crisis is going to get better in the second half of 2022. Also I am pointed out that the huge demand for GeForce graphics cards and GPUs are expected to outweigh their supply of existing chips." My thoughts are that Nvidia may finally have factored in the GPU/CPUs for the Switch 2 into their time line for this year due to their silicon situation. Hopfully this will be a reality.

      Asif, I know your not a big MS fan but can you deny that the thought of playing Nintendo games on your PC or XBSX all juiced up would not be totally amazing!!!!!??????????????????!!!!!!!!!!!!!!!!!!! I have been playing God of War on My PC recently and it is incredible!!!!!!!!!!!!!!!!!!!!!! More and more big companies will not be able to not support the PC going forward there are just too many potential customers, mountains of money to be made and millions of loyal PC customers to be captured it just makes sense. Capcom knows it and so does Sony and many others.

      Personally I don't want MS to Buy Nintendo out right for I sort of fear of any influence that would change them(even though MS does not roll like that, see The Ascent, Psychonauts 2, etc). To Me Nintendo's software is magic and has a undeniable soul fused into it and I would hate that to be westernized or altered in any way. Having said that My dream is that MS would make an exclusive deal(partnership) where their software can be sold on the PC or even the XBSX/XBSS. If MS can sell and port Ori 2 to the Switch why not bring Nintendo games to the PC and XBSX. The Switch is not a PC or a XBSX and the design will always make it be a different market + product and keep it's identity safe. Even if Nintendo games where on the PC and XBSX everyone would still buy the Switch 2 in 1 second.

      I guess at the end of the day you have to ask your self:

      Was there anything wrong with selling God of War on the PC?
      Was there anything wrong with selling Ori and the Will of the Wisps on the Switch?
      Was there anything wrong with selling XBSX games on the PC?

      My answer to these question would 100% = NO and it has only been a benefited to everyone involved!!!!!!!

      [ Thoughts out ] + https://www.youtube.com/watch?v=FaLyasJPyUU :)

      • reply
        January 18, 2022 1:26 PM

        If it wasn't for software exclusivity, Wii U would have only sold like 500,000 units. Instead, they sold 13 million which was enough to keep them alive to fight another day.

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          January 18, 2022 1:36 PM

          Sure that was then and it made sense for they did not have a hybrid handheld system. The Design of the Switch it self is a console exclusive on it's own, both MS and Sony have nothing to match or counter it. The industry is changing and a pure exclusivity model is going to be a thing of the past.

          If Nintendo did what I suggested everyone would still 100% buy a Switch 2 and it would sell out.

          Timed exclusive is going to be the next norm/future you heard it here first everyone will eventually do this it is only a matter of time.

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            January 18, 2022 1:47 PM

            I'm not so sure Switch would be approaching $100m units without Mario Kart 8 as an exclusive

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              January 18, 2022 2:03 PM

              Well from what I gather the majority play the Switch in portable mode so if We had numbers of how many customers are none portable players that might paint a different picture. I think I am the only person I know who has not played their Switch in mobile mode and only got it for the games.

              I think the main thing is there are Nintendo connoisseur / collectors / fans that just love their hardware/products and almost see it as a toy that you got to have and that user base or rather the majority of Nintendo fans would never say "fuck it I am going to play these games only on the PC or XBSX and ditch Nintendo hardware". I feel even with Sony and their console consumer base they feel the same way they have pride being a PlayStation owner and a console gamer. I seriously doubt their are stats that show millions of Sony fans and consumers are selling their PS5's because God of War is on the PC or because of Days Gone and Horizon Zero Dawn.

              It is almost like trying to convince a Apple fans to get rid of their iPhone and use an Android phone or PC laptop, it's just not a thing and that just doesn't happen.

              So in short I bet the numbers would be the same if not even higher. They most likely be higher because all those Xbox console customers and PC customers most likely would go "Hey!!!! I can get a Switch 1 or 2 and play these games on the go with cross saves!!!!! That be sweet for when I am on the go and not home!!!! Shit, I can play at lunch at school or at work then carry on at home on My PC or console!!!!". To Me it is an easy sale and I bet money the numbers would be even bigger and you get way more Switch sales from that draw alone.

              I wish there was a alternate universe where they tried this :)

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                January 18, 2022 2:27 PM

                I had an Xbox 360 and moved to PS4 after that for my main gaming. I had a Wii, Wii U, and now have a Switch as well. I don't feel the need for an Xbox because I have my PC, but I do like playing PS5 on the TV, and all Nintendo games. I don't think I would want to play Nintendo games on a computer, it just wouldn't feel right.

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                  January 18, 2022 3:06 PM

                  Cool and this is what I mean, I really can't see those who love Nintendo to dump the console and play their games only on the PC if that was ever a thing. Really I just think it would gain new customers and those that where Nintendo fans would just keep doing their thing. Of course if any Nintendo fans that wanted better graphics and resolutions would probably get a second copy or if it was play anywhere then they be all over it if they could play their games all MAXed out on their PC or other console when not mobile.

                  I think the concern is that no one would buy Nintendo consoles and I just don't think that is true at all or will ever happen.

                  Anyways I doubt it is going to happen right now but if it does I am sure everything will be fine!

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                January 18, 2022 2:52 PM

                Just for reference, from Nintendo in 2017.
                'The majority of players, a little over 50 percent, use both the TV mode and handheld mode. This is followed by around 30 percent of players who primarily use the tabletop of handheld mode, with under 20 percent of players primarily using the Switch in TV mode.Oct 31, 2017"

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