Nintendo’s Tiny Licensing Business Could Have a Big Future
Nintendo’s (OTC:NTDOY) stock declined about 30% this year as investors fretted over its post-pandemic slowdown. The Japanese gaming giant’s revenue rose 34% in fiscal 2020, which ended this March, as many people purchased Switch consoles and games throughout the pandemic.
Unfortunately, Nintendo expects its revenue to decline 9% in fiscal 2021 against a tough year-over-year comparison. It expects the ongoing chip shortage to exacerbate that slowdown, and it’s facing fresh competition from Sony and Microsoft’s newest consoles.
Those concerns dampened the market’s enthusiasm for Nintendo’s stock since the company generated nearly 97% of its revenue from its gaming consoles and software in fiscal 2020. However, investors shouldn’t overlook its tiny licensing division, which could grow a lot bigger over the next few years.
Image source: Nintendo.
