Nintendo has touched most people’s lives. Dating back to 1889 when the company originally produced playing cards, this Japanese powerhouse has sought to bring joy to people by offering unique and innovative gaming experiences. In 2025, Nintendo stands out as a self-sufficient empire with a collection of impressive intellectual property built over the past half century, including titles such Mario, Pokémon, and the Legend of Zelda.
Its portfolio is unmatched, containing 17 of the top 20 best-selling console games of all time1. However, unlike other companies in the industry, Nintendo chooses to exclusively offer its top tier games on its own devices. This strategy enables tighter control of its intellectual property and helps form a far stronger relationship with users.
Increasing resilience
As times have changed, Nintendo has moved with them. In recent years, we've witnessed significant changes to its corporate culture and business model that we believe will lead to increased resilience. It all started with the Nintendo Account – introduced in 2016 – that has now grown to over 200 million users. The account provides a unique user ID to all the gamers, providing a unifying experience across all of its platforms, similar to how an Apple ID works. This has enabled Nintendo to introduce new user experiences, such as the online subscription model where gamers can play exclusive games, helping increase the distribution of games digitally.
Shuntaro Furukawa, Nintendo’s president – the sixth in its entire 136-year history – has also embarked on a strategy of giving more people access to its intellectual property. This has been achieved through theme parks, merchandise, and what we witnessed with the 2023 Mario movie that was among the all-time highest grossing animated films, further cementing consumer loyalty.
Moving beyond boom and bust
There has also been a significant change in the relationship between Nintendo and its customers in recent years. Historically, it was all about the money. Games were designed for a particular generation of hardware, and they could only be played on that hardware, until it became obsolete. That led to incredible intellectual property, but it also led to a boom and bust cycle for the business around product launches, something that we seek to avoid as quality investors.
However, that all changed with the launch of the Switch platform in 2017. For the first time in its history, future success is no longer just about the hardware, but the Nintendo Account is becoming more important as it includes a library of games in addition to the gaming history of the players. Therefore, Nintendo can now monetise the growing install base of the Switch players and doesn't have to reacquire games from scratch anymore.
Every time Nintendo launches a new console, we believe the market underestimates what impact this could have on the earnings growth profile of the company. We believe Switch 2 will be no different, with Nintendo delivering a very innovative, differentiated way to play and experience content, consistent with its history.
Nintendo’s five key attributes
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No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided.
This is not a buy, sell or hold recommendation for any particular security.
This security was chosen as it is a leader in its field and is well-rounded representation of our philosophy and process.
For further information on a specific portfolio names and how the overall strategy performed, please see the important information and standard performance slides.
1 Source: VGChartz and Bernstein analysis.
