Berkshire Hathaway’s Charlie Munger considered acquiring Nintendo (NTDOY) during the Wii U era

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More than a year has passed since the demise of renowned investor Charlie Munger, Warren Buffet’s longtime friend, yet tales from his extensive stock-picking career continue to emerge as people revisit old interviews and friends share anecdotes. In a recent episode of the Grit podcast, Bobby Kotick, former CEO of Activision Blizzard, disclosed an intriguing piece of news concerning Munger. It seems that the deputy at Berkshire Hathaway once contemplated purchasing Nintendo during the Wii U era.

Here’s an excerpt from Kotick’s comments on the Grit podcast – Episode #229:

He goes, “You know, I was looking at a couple other companies in your sector. I think if we bought yours, we should buy that company Nintendo, too.” He said, “Have you guys looked at it?” I was like, “Yeah.” It was trading [at the time] at like 13 billion, with 7 billion in cash. He goes, “You know, I don’t think anything is gonna go really bad before I’m dead, and then if it goes bad after I’m dead, they’ll just chalk it up to the folly of an 82-year-old, so you don’t have to be so concerned about disappointing me.”

During the period when Nintendo was struggling, marked by three straight years of financial losses and widespread predictions that the Wii U’s poor performance would signal the end of its hardware manufacturing days, it seems Kotick had a conversation with Munger about Nintendo’s valuation. The timing of this discussion, however, wasn’t explicitly mentioned by Kotick, but it appears to have occurred during the era when the Wii U was dominant.

It appears that Charlie Munger recognized an opportunity that many investors missed back in the early 2010s. Despite being a well-known brand, Nintendo was undervalued for years. The potential rewards seemed to significantly exceed the risks. Fortunately, Berkshire Hathaway chose not to buy Nintendo, enabling astute investors to earn more than 600% returns on their investment in the stock over the past decade.

2011 saw Nintendo being abandoned to its fate, but by 2025, the company’s stock has reached unprecedented peaks thanks to the phenomenal success of the Switch console. This hybrid device that functions as both a handheld and home console was launched in 2017, and since then, more than 150 million units have been sold worldwide. Investors who chose not to follow Munger’s advice and invest in Nintendo instead have been richly compensated for their decision.

Over the recent years, Nintendo has diversified its income sources beyond just video game software and hardware sales. Now, it also manages amusement parks and produces films. Despite some uncertainty surrounding the launch of Switch 2, the company is currently in better financial shape than when Charlie Munger was considering a Berkshire Hathaway takeover.

This article serves an educational function and isn’t intended as financial guidance. Remember to think about your own investment timeline, risk preferences, and seek advice from a financial expert before putting this knowledge into practice.

Full Disclosure:

In the context of this piece I’m referring to, here’s how I, as a fan, would rephrase that statement: “At the point when this article was written, it was known that Asif A. Khan, his relatives, and Virtue LLC (his company) held these positions in Shacknews.

Long Nintendo via NTDOY shares

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2025-02-14 00:57