Nintendo stockholders have been profiting from their investments over the past year, but that might change in the near future. At least, that's what KBC Securities Japan thinks, and the company has thus downgraded Nintendo's stock investment rating from "buy" to "hold."
One reason for the downgrade is the fear that Nintendo's sales will stall. Now that the Wii and DS have been around for a while, KBC is worried that demand for Nintendo's products will lessen in the coming months. The weakening dollar will also make overseas sales drop in value.
Since economics is like alien speak to us, we're not sure how much weight KBC's rationale holds. It's true that Nintendo will have a hard time showing up the numbers of Wii Sports
, Wii Play
, and Wii Fit
, especially in Japan -- the casual market
is a key area when it comes to Nintendo's more explosive sales. Also, the DS is no longer the dominating force in Japan
like it used to be, while the PSP has increased in popularity. Yet, even so, demand for Nintendo consoles and games is still high
worldwide, so KBC might be jumping the gun.