Nintendo Switch is not the Wii U as the Company Doubles Production of the Console

It seems like the Nintendo Switch is playing with power.

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Nintendo has announced that they will double production of the new Switch console from 8 million to 16 million in their next fiscal year beginning on April 1. This comes on the back of news that Nintendo had sold nearly 1.5 million Switch consoles in its first week of sales. This is undeniably great news for the company, as Nintendo's previous Wii U system sold 3 million units in its launch quarter only to fall flat on its face selling slightly less than 3 million units in the next 12 months.

Nintendo specifically mentioned that better than expected demand for the Switch console has lead them to this decision to ramp up production. This should also help the company draw third party support from some tepid partners who sat out the Wii U's product cycle. Shares of Nintendo were up 1.69% in Japanese trading and the stock is up nearly 10% since the day before the Switch console launched.

From a technical (chart-based) perspective, Nintendo shares have an actionable trading signal. Shares of NTDOY (the company's American Depository Receipt) have formed an "inside month and up" buy signal above $26.79/share. There are still nearly two weeks left to this monthly trading signal. 

Nintendo's stock is still stuck inside of the range formed during the Pokemania of July 2016, but after trading inside month and down in December of last year, we have our first buy signal. NTDOY traded between $24.12/share and $27.89/share in January. Last month, the stock traded within that range with a low of $24.68/share and a high of $26.76/share. The current buy signal became actionable last week when the stock traded above $26.76/share and today's news confirms what the chart was already telling us.

Current momentum indicates that the stock is headed for the $30/share level. It is still a long way back to the 52 week high of $38.25/share, but it is hard to not be more bullish on this stock given today's news. Traders still have time to play NTDOY for a trade this month and as I have previously indicated, I strongly believe that Nintendo is a great long term investment.


Full Disclosure:

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

Long Nintendo via NTDOY ADR

Long Apple via AAPL shares and options

Asif Khan is the CEO 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

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      March 17, 2017 12:45 AM

      Aww yeah!!!

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      March 17, 2017 12:57 AM

      In slightly-related news, I can now take my Switch to some shops in shops in Tokyo and make a small profit by selling it to them, even figuring that I paid sales tax and a $10 markup. I'm sure it'll appear on their shelves at $450+ within a few hours, if I did that.

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      March 17, 2017 12:58 AM

      Pretty excited to get my hands on one still.

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      March 17, 2017 3:38 AM

      I'm so happy they got a good start with this. My biggest fear was Nintendo doubling down on the Wii target audience after the WiiU. The only hint at that is 12switch and that thing doesn't seem to pick up any pace, with it going on sale even prior to release over here while everything else if overpriced.

      Also the more successful it is, the longer it will be around, the higher the chance my favourite Nintendo franchises will re-emerge =D

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      March 17, 2017 6:31 AM

      Woo, great news :)

      Potential for some nice gains here if they sell through that many units. The price today represents a lot of caution imo.

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      March 17, 2017 6:36 AM

      Selling well but it is a POS I mean look at this! http://www.pointandclickbait.com/2017/02/havent-finished-zelda-yet-but-christ-i-need-some-content/

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      March 17, 2017 6:51 AM

      Awesome, awesome news. I really think the Switch has a super bright future.

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      March 17, 2017 7:01 AM

      BTW Asif, how you liking yours? I am loving mine! Quakecon switch up!

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        March 17, 2017 9:29 AM

        I am very happy with Nintendo Switch. Instant on, the ability to Switch *snaps* between TV and handheld, and Zelda have made this a delightful launch. I am about of a Nintendo fan, and this is really just great to see. It was easy to count them out last year, but man. Great to see them getting back to business.

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      March 17, 2017 7:24 AM

      But artificial scarcity!!!

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      March 17, 2017 7:30 AM

      What happens when people start selling theirs because the only game for sale is Zelda?

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        March 17, 2017 7:50 AM

        Oh shit, where did I get these other games for my Switch? Did they make a mistake at the store? Should I bring these games back since they can't be for the Switch, you just said Zelda is the only game.

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          March 17, 2017 9:06 AM

          What else are you playing? I took a look at the catalog and didn't see anything interesting that wasn't already available on Playstation or PC.

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            March 17, 2017 9:21 AM

            Didn't you see above? I'm only playing Zelda. It's the only game for sale.

            But seriously, if I must prove myself to you...

            Snipperclips is the definition of interesting that isn't available on Playstation or PC. I've actually had a lot of fun playing 1-2-Switch with friends and family, some of whom are more interested in the system after playing some of the mini games. We also own Super Bomberman R but I don't think it was worth the cost, I didn't buy it though so whatever. Four player Bomberman is still as fun as ever. I'll be purchasing Fast RMX when I have a little more expendable money since I enjoyed the original version on the Wii U a lot and this version is vastly improved. What are you fucking playing?

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        March 17, 2017 7:52 AM

        As long as they have another major title in the next 6 months they are fine. Zelda will sell the system for easily that long. Splatoon 2 might even be that game for all we know.

        The point is don't be so damn negative. Video games are back and they are good!

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        March 17, 2017 7:53 AM

        They failed on software early with Wii U, but it doesn't appear to be the case with switch. They have big titles slated every few months the rest of the year.

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        March 17, 2017 7:55 AM

        Mario Kart in April, Splatoon 2 summer, Mario Odyssey by the holidays

        In between those will be loads of formerly mobile and indie titles

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          March 17, 2017 8:03 AM

          And VC at some point

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            March 17, 2017 8:10 AM

            Looks like they got some of the neo-geo games now too.

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        March 17, 2017 8:05 AM

        I could argue the PS4 didn't really hit it's stride until Uncharted 4 was released last May. Prior to that it had some good stuff like Bloodbourne, but mostly it was a bunch of cross platform games that didn't really give you a reason to buy a PS4 specifically, especially if you had a decent PC or XBone that could play Fallout 4, Witcher 3, GTA5, etc. Since last May the library has filled out and is absolutely worth buying of course.

        Switch on the other hand has Zelda and Mario in the first 9 months, plus Splatoon 2 and MK8. It's not that there's no games, it's can they keep the awesome games coming year after year. E3 and TGS should be interesting.

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        March 17, 2017 8:59 AM

        Zelda will take a long time to play through unless your goal is to finish by speed run or you have a ton of free time.

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        March 17, 2017 9:14 AM

        i guess it's a good thing Zelda isn't the only game for sale.

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      March 17, 2017 7:44 AM

      Awesome, glad this is turning out well for them.

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      March 17, 2017 8:01 AM

      NTDOY up 4% awww yiss.

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      March 17, 2017 8:28 AM

      but when can i get one????

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        March 17, 2017 9:04 AM

        When they are in stock silly

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      March 17, 2017 8:33 AM

      Where can I actually buy one right now?

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      March 17, 2017 9:08 AM

      oh cool, that means i can get one sooner rather than later

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        March 17, 2017 9:08 AM

        (because there will be more available due to the increased production. pretty simple imo heh)

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      March 17, 2017 9:23 AM

      I read this in Maury Povich's voice and immediately imagined a smooth dancing Switch gesticulating wildly as a sad Wii U looked on, only a few feet away.

      lol