FPA Crescent Fund, advised by First Pacific Advisors, LP on Nintendo Co., Ltd.
Thesis
Nintendo remained a holding despite modestly detracting from performance during the period. Operationally, the company benefited from the successful launch and adoption of the Nintendo Switch 2, which supported both hardware and software sales. FPA continues to view Nintendo as a high-quality franchise supported by valuable intellectual property and a long runway to monetize its gaming ecosystem. The principal near-term issue identified in the letter is that rising memory prices could squeeze hardware margins.
“We continue to view Nintendo as a strong franchise with valuable intellectual property and a long runway for monetization across gaming.”
Key risks
- Higher memory prices could pressure Nintendo's hardware margins