Nintendo is one of our investments in the portfolio. It has some short-term headwinds (as the console cycle move against the company), but with several upside opportunities/options long term. Including but not limited to:
· Increased digitalization (moving away from physical game format and thus higher margins)
· More recurring revenue (more stable cash flows)
· Less dependency on console cycle as the platform/OS becomes more central and less dependent on hardware (lower console cycle risk).
· Leveraging IP into huge mobile market (very weak presence today) and other (e.g., movies).
· In addition, the company is poorly managed in terms of capital allocation, with a quite large pile of cash in the company, something that can only get better.
The last two points are seen as options in our case.