Tuesday, August 23, 2011

Nintendo shares rally, 3DS changes coming?

Nintendo shares rose 8.4% to 13,100 yen on Tuesday trading after rumors surfaced that changes are in store for the company's 3DS handheld gaming system. Short-covering may have also contributed to the outsized move as short sellers withdrew their bearish bets on the embattled video game maker. Dogged by slow sales of their latest handheld wunderkind which was supposed to have taken over the world by now, Nintendo's leadership is taking a closer look at the 3DS according to French technology website 01net.

One of the changes mentioned by 01net is the development of a second analog stick to be mounted on the right side of the 3DS. As improbable as that sounds, if Nintendo does proceed with a hardware enhancement, it would likely have to be included free with future games that support the controller as an in-game-freebie for wide adoption. 01net also mentions a new Nintendo handheld gaming system that is set to replace the 3DS next year which again, sounds highly suspect for Nintendo to abandon the 3DS platform so quickly instead of following the usual 5-7 year life-cycle of gaming platforms. Can Nintendo pull an HP, who dumped the HP Tablet only 7 weeks after the release? Both rumors from 01net get the "HIGHLY UNLIKELY" stamp along with flashing lights on the B.S. meter.

In addition to the rumors sprouting from 01net, Dow Jones Newswires reports that Nintendo will host a 3DS trade show that is taking place next month in Tokyo. Investors may be heartened by Nintendo's proactive steps to shore up the 3DS after the company's stock has taken a drubbing this year.

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