It has been a roller-coaster ride for video game maker Nintendo (NTDOY) this year.

Although Pokemon Go was a runaway global phenomenon, the much-hyped Super Mario Run failed to attract user-attention or investor interest.

After hitting a 52-week high of $38.25 in mid-July when the Pokemon Go wave was riding a crest, the stock witnessed an almost 35% downswing amid concerns about its NX consoles and the disappointing conversion rate for Super Mario Run.

 

Nintendo is clearly a volatile stock, with massive ups and downs.

The company has a complicated past. Tracing its origins to producing hanafuda playing cards, Nintendo has traveled through several niche sectors, finally finding strength as a video game creator in the 1970s.

Years later, in the 2000s, Nintendo had huge success with its DS, 3DS and Wii systems.

By last year, the company had begun working on games for smart devices as well as a new dedicated games platform with the code name "NX," officially called Nintendo Switch.

By this past July, Nintendo's Pokemon Go mobile application was an instant worldwide sensation.

But there was a chink in the armor. Nintendo owned 32% of Pokemon's intellectual property and would see just a portion of the positive impact, though investors weren't privy to this.

The partial ownership situation obviously tempered earnings expectations as well as the stock price.

However, mobile game Super Mario Run, which was developed in-house, was a major growth driver, delivering a considerable boost to Nintendo's stock.

Post-release, Super Mario Run smashed App Store records with downloads of more than 40 million in just four days on the iOS.

The situation took a turn for the worst almost immediately, however. The stock price began a downward spiral, after analysts cautioned that just 8% of early respondents were ready to convert to the $9.99 purchase for the full version.

Super Mario Run's ordinary debut leaves a shadow over Nintendo's first full foray into the world of mobile gaming. Gamers were dissatisfied with the $9.99 price tag after just three levels of free play.

Super Mario Run will make its entry into the Android OS eco-system early next year.

Nintendo and competitors Activision Blizzard and Electronic Arts are all rapidly exploring the mobile-gaming segment.

Nintendo sells its hardware at a profit, unlike gaming rivals Xbox maker Microsoft and PlayStation maker Sony.

Trading at more than 39 times one-year forward earnings, Nintendo's shares are cheaper than they had been, but they continue to trade at a premium to the industry average.

Analysts have set their sights on the company's earnings-per-share growth for the fiscal year ending March 17, which is expected to be more than 293% from the depressed levels a year earlier.

Meanwhile, Nintendo is looking at possible expansion maneuvers.

One possibility is a theme park collaboration with Universal Studios, which is owned by Comcast, called Super Nintendo World, scheduled to open at Universal Studios Japan in time for the 2020 Tokyo Olympics.

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Theme parks, observers point out in Walt Disney's case, are long-term plays, with a certain time element before consistent cash flow generation.

With risks around the NX acceptance and additional mobile-game launches, Nintendo has a complex terrain to traverse. The stock could correct another 10% to 15%.

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The author is an independent contributor who at the time of publication owned none of the stocks mentioned.