Nintendo's Mario Kart 8 Deluxe is a 'mega-hit on a different scale' (NTDOY, NINTENDO)

Nintendo's stockis on fire. The company is having by far its best year since the great recession due to Nintendo Switch and its hit gamesMario Run, Pokemon Go, and Zelda Breath of the Wild.The stock is up 87% over the last year.On top of all this, Nintendo just released another smashhitMario Kart 8 Deluxe.Jefferies equity analyst Atul Goyalhas been closely following the progress of the new Nintendo Switch console and its games. In a note circulated to clients May 5,Goyal reiterated his "Buy" rating and 39.200 price target, implying massiveupside potential of 38% for the stock.Mario Kart 8 Deluxe had a record release day with459,000 units sold in the US. That's the highest for any Mario Kart game since the franchise began in 1992. The previous record holder was Mario Kart Wii, and this game beat that record by 13%. Here's Goyal on the enormity of the success:"No, this is not just any ordinary success. The scale of this success is many times bigger than what is visible with 'MK8D sales of 459K units exceeded MKWii sales of 405K'. Analyzing the scale, we realize that like-for-like, MK8D is mega-hit on a different scale altogether (maybe 5-10x better).On the launch day in the US, MK8D sold c. 459K units. By 31Mar'17, Switch had an installed base of c. 1.2m in 'The Americas' (and probably 1.5m by Apr-end). The earlier launch day record was earlier held by Mario Kart Wii (launched in Apr 2008). Recall that MK-Wii was launched 17 months after Wii launch (Nov-2006). My 31Mar'08,Wii had a global installed base of 24.45m (Switch was at c. 2.74m by '17 Mar-end) and its installed base in The Americas was 10.6m (Switch was 1.2m)."Wall Street did not expect the new Mario Kart game to be such a huge sensation asall of itsfocus has been onZelda Breath of the Wild,which is now the highest ranked game onMetacritic with a rating of 97 points. Mario Kart 8 Deluxeis tied for second place with PS4's Persona 5.Goyal noted that Wall Street started out with a very negative view of Nintendo, sending the stock down 10-15% on two separate occasions, but that was a huge mistake and thatthe "market may need to make a 180-degree change in view."Goyal believesSwitch and its games could result in 2018 operating profit that is "well beyond the company's conservative guidance."Click here for a real time Nintendo chart.Join the conversation about this storyNOW WATCH: These are the small, agile new aircraft carriers meant to take F-35s into battle
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