The Fund also initiated a small position in Nintendo Common (NTDOY
). Based in Japan, Nintendo is a producer of video game hardware and software. Throughout most of its history, the company has been quite profitable owing to successful products, such as the Wii video game console (hardware) and the Super Mario Brothers and The Legend of Zelda software franchises. However, currently the company is losing money because of fierce competition from traditional competitors (Sony's Playstation and Microsoft's Xbox), as well as new competition from mobile gaming platforms. Despite these significant challenges, Fund Management believes that the company has numerous levers to return to profitability, including the potential success of some of its upcoming products and / or a shift in its operating model to allow its software to be used on competitors' platforms. The shares were purchased at a price that equates to the value of the company's cash and investments, land and 55% ownership stake in the Seattle Mariners, ascribing no value to its tremendous software library and brand name.
From Third Avenue's third-quarter letter
, by Ian Lapey, portfolio manager.
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