I'd be very tempted to enter Nintendo again at the right price.

Yesterday, I released a new deep dive on the video game industry, and I believe Nintendo is in a great position to be a MAJOR beneficiary of AI. They are in one of the most defensible positions in the entire industry.

I'm not overly keen to get back in, though. Not because of fundamentals, but because of current market structures.

Nintento was outright ignored until we got very close to the Switch 2 release. All the things the company had going for it, and that were obvious to anyone tracking the company somewhat closely – releasing Switch 2 eventually, diversifying beyond AAA games, building a $NTDOY universe (movies, theme parks), becoming a platform more open to 3P titles, higher digital sales penetration, backward compatability (what else am I missing?) –, AND YET, the market didn't care... UNTIL the very last moment.

Nintendo now had arguably the best transition from one console to a new one that the industry has ever seen. And the market no longer cares.

And there's possibly going to be a persistent drag on video game stocks for the next 1-3 years (and beyond?), and what's going to be the catalyst for Nintendo not be ignored by the market? A new Mario movie is around the corner, a new AAA title announcement is inevitable ... these won't make anyone fall off the chair.

You don't need a catalyst if you have extremely talented capital allocators. Nintendo's management is decent, but they're very prudent – too conservative for my liking –, and they won't pay a special dividend at too cheap of a valuation or launch a monster buyback program.