Long-time Nintendo (NTDOF) collaborator Masahiro Sakurai, the creator of Kirby and director of the Super Smash Bros. series, warned that AAA game development is “becoming unsustainable.” He points to the increased size of games and says that there’s too much work needed on them. Despite this warning, NTDOF stock was up today.
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Sakurai is far from the only video game developer who believes this. Several other prominent figures in the industry, including Sony’s (SONY) former PlayStation head Shawn Layden, have warned that the growing cost to develop AAA games is a problem the industry needs to tackle.
For Nintendo’s part, the company releases several AA games, those with smaller budgets and development times, between its AAA releases. This allows it to have a variety of exclusive titles for its consoles and frequent game releases. This is what partially led to the success of the original Switch and could see lightning strike twice with the Switch 2.
Sakurai’s Suggestion to Solve the AAA Development Slog
Sakurai didn’t just complain about growing development costs for AAA games. He also suggested a potential solution. The Nintendo veteran believes that generative artificial intelligence (AI) could be used to make game development more efficient.
Sakurai told IGN, “I think we are getting to the point where (AAA studios) have to change their way of working by using gen AI to improve work efficiency.” He also noted that “only the companies that successfully respond to these changes will be able to survive.”
NTDOF stock was up 2.06% as of Tuesday morning, building on a 49.82% rally year-to-date and a 58.56% increase over the past 12 months.
Is Nintendo Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Nintendo is Moderate Buy, based on eight Buy, two Hold, and a single Sell rating over the past three months. With that comes an average NTDOF stock price target of $91.34, representing a potential 4.7% upside for the shares.
