18 October 1985: Nintendo tests the NES in New York
Two years after a crash had left American retailers convinced video games were a dead fad, Nintendo began a test launch of its Nintendo Entertainment System in New York. It cleverly marketed the console as a toy, complete with a robot accessory, to get it onto store shelves. The gamble worked, reviving the home console business and making Nintendo a household name in the United States.
The lesson: An industry declared dead can be an opportunity for someone who does it better.
What it meant for investors
$1,000 in Nintendo at the start of 2000 → $5,667 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2000, the first year in our price data after the event. That is 5.7 times the money, and $1,041 more than a plain index fund made over the same years.
What Nintendo teaches: Hit-driven businesses swing between genius and doom with each product; extrapolating the latest console's sales is a forecast about creativity, not about earnings.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2000 | $15.00 | $5,667 | $4,626 |
| 2003 | $9.00 | $9,444 | $7,727 |
| 2005 | $11.00 | $7,727 | $5,763 |
green = beat the S&P 500 · red = lost money
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Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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