An investor believes the Japanese console manufacturer could be on the level of Netflix (which is flying at the moment) and Disney+ (a Netflix-competitor).

Reuters acquired a letter from ValueAct Capital Partners. It disclosed that since April 2019, the firm has bought about 2.6 million shares in Nintendo, which gives about a 2% stake for them in the big N, worth about 1.1 billion dollars.

The letter also says that ValueAct has met Nintendo’s management, and they also believe in their president’s, Shuntaro Furukawa’s vision. A Nintendo spokesperson confirmed to Reuters that Nintendo is aware of ValueAct holding a stake in them and that they have been engaged in conversation with them, but they can’t disclose the details of these conversations with their investors.

„We believe Nintendo will be one of the largest digital media services in the world, in a category with the likes of Netflix, Disney+, Tencent Interactive Entertainment and Apple Music,” ValueAct wrote. (No wonder: Animal Crossing: New Horizons has sold so well digitally that it broke records. We wrote about it before.) The big N has been trying elsewhere, too: they are building the Super Nintendo Land in Universal Studios’ theme park in Osaka, Japan, and they also teamed up with Illumination Entertainment (the creators of Despicable Me) to work on the Mario animated film.

The letter adds that Nintendo hasn’t thrived as much as Electronic Arts and Activision Blizzard (no wonder there again: the Nintendo Wii U was a flop…), but their fortunes have improved over the past ten years. ValueAct thinks Nintendo’s digital transition (better eShop for the Nintendo Switch, plus its online services…) will greatly benefit the big N.

ValueAct is an activist investor, though. In other words, it’s a company that uses its stake (minority stake at that) to influence the companies it has a stake in to drive change at them. Business Insider reports that in July 2013, they demanded seats at Microsoft’s board because they didn’t agree with Steve Ballmer’s plan to focus on services and the company’s devices. Ballmer, who was the CEO of Microsoft at the time, left the company a month later. Now, ValueAct doesn’t want seats in Nintendo’s board, but they want to advise them from them serving at Microsoft’s and Adobe’s boards.

SeekingAlpha reports Nintendo’s shares rose by 4.9% following Reuters’ report on ValueAct’s stake. Weird times…

Source: Gamesindustry

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