We Study Billionaires - The Investor’s Podcast Network

TIP798: Nintendo Stock Deep Dive w/ Clay Finck

6 snips
Mar 13, 2026
A deep history of how a playing-card company became a gaming powerhouse. The rise and rescue of the Switch and why iterative hardware matters. How franchises, parks, films, and mobile extend intellectual property. The shift from one-time sales to recurring revenue and what Switch 2 could mean for Nintendo’s ecosystem and valuation.
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ADVICE

Make Your Platform Easy For Developers To Win

  • Encourage developer adoption by lowering technical barriers and providing strong platform support to grow content and lock in users.
  • Clay notes Nintendo supports popular engines and improved publisher relations to attract thousands of third-party titles.
INSIGHT

Nintendo Sells Hardware Profitably And Takes Platform Cuts

  • Unlike Sony and Microsoft, Nintendo sells hardware at a profit (10–20% gross margin) and takes a 30% fee on third-party game sales.
  • This hybrid gives Nintendo recurring high-margin software revenue without subsidizing consoles.
INSIGHT

Huge Installed Base But Recent User Growth Is Lumpy

  • Annual active users in the Switch ecosystem grew from 16 million in 2018 to 129 million, with roughly 34 million NSO subscribers historically.
  • Clay notes flat recent monthly users despite Switch 2, suggesting many buyers were upgrades not new users.
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