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A small research firm named Media Create Co (MCC) in Tokyo is helping hedge funds trade shares of consumer electronics company Nintendo Co. Founded by Atsushi Hosokawa, the company tracks sales of Nintendo products in Japan and other Asian countries and has attracted over two dozen clients, Bloomberg reported.
MCC estimates shipments of Nintendo ahead of the official company releases and has been very precise up till now. In 2018, the company said that Nintendo's Switch console was not doing as well as expected, information which made millions for clients who shorted the stock before the official announcement in January.
An 11-person firm, MCC is getting famous among hedge fund managers. Its latest reports show that Nintendo will comfortably hit its revised targets, indicating that the shares could get a boost this year. Clients pay a fee of $20,000 or more annually for these forecasts.
"Our data doesn't fail. The Switch is still headed for growth in its third year," Hosokawa told Bloomberg.
MCC is one of many specialist data providers that help investors make better decisions about particular industries. Hosokawa has built MCC upon close relations with over 2,000 gaming shops and publishers. These are the sources of MCC's data reports on hardware and software in Japan, South Korea and Taiwan.
Analysts said that the data is not exhaustive but it is enough to extrapolate valuable information. These research firms pay more attention to sales than earnings reports. For instance, after a new Nintendo console launch, their data is useful to determine the future profitability of the company.
Hosokawa said that clients started showing more interest in Nintendo after MCC's reports showed that Switch sales were flat, which was not compatible with market consensus for a more than 30 percent jump in the current fiscal. Around this time, the stock began to fall.
Hosokawa is positive about the stock this fiscal year, expecting hardware shipments to peak. The stock has gained 1.1 percent this year, after it fell 29 percent last year, its worst performance since 2011.
Media Create was founded by Hosokawa in 1994 when the original PlayStation was launched in Japan. That is when he started developing his contacts and relationships with retail outlets, asking for point-of-sale data.
"With our data, we are trying to be the infrastructure for the whole industry. I'd like to think that's why overseas investors trust us," Hosokawa said.
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