$NTDOY: is Nintendo's flywheel actually there? | Accrued Interest
Speakers
Simeon McMillan
— Media analyst, Accrued Interest
Andrew Walker
— Host, Yet Another Value Blog
Summary
Andrew Walker hosts Simeon McMillan for a quarterly media check-in focused on Nintendo, Spotify, and Netflix. Simeon remains bearish on Nintendo, arguing its IP flywheel is not materializing and that Switch 2 software attach, flat online accounts, and memory-driven pricing weaken the case. He is bullish on Spotify as a quiet compounder and on Netflix as a cheap, margin-expanding global streamer. The conversation also covers AI content risk, sports rights, streaming competition, and Paramount's weak position.
- Nintendo is still tied to the hardware cycle and lacks a durable IP flywheel.
- Switch 2 attach rate, flat Nintendo Online accounts, and memory costs are key Nintendo concerns.
- Simeon is long Spotify on better label economics, margin expansion, audiobooks, and podcasts.
- Simeon is long Netflix on global scale, profitability focus, and margin expansion.
- Andrew worries Nintendo's governance and licensing strategy hurts long-term brand relevance.
- AI-generated content and YouTube are monitored as risks to streaming platforms.
- Sports rights and NFL ratings are seen as evidence of Netflix's distribution power.
- Paramount is criticized as an uneconomic competitor reliant on owner wealth.
Ideas
Nintendo flywheel missing; avoid two years
Simeon is bearish/avoid on Nintendo because it remains an incredibly cyclical stock dependent on the hardware upgrade cycle, and the promised IP flywheel is not there. Switch 2 launch attach rate was below Switch 1 and was flattered by the bundled Mario Kart; Nintendo Switch Online accounts have been flat for years; the pipeline lacks clearly dated flagship titles until possibly Pokemon in 2027; and Nintendo took its first early mid-cycle console price increase because memory costs are not coming down. He says it is not an absolute alpha short and not a crash call, but it is not a stock you can put away for two years, and you buy it only when it is down into major game releases.
Nintendo governance risks long-term brand relevance
Andrew worries that Nintendo is run like a Japanese legacy company for a dream rather than for shareholder value maximization. He thinks it should have sold itself when it could have commanded a premium, lacks mobile/online breadth, and is not aggressively licensing Mario or Zelda IP to Netflix, Disney+, or other media to recruit the next generation. By maximizing the nostalgic millennial fan base rather than younger kids, Nintendo risks long-term brand erosion, which he sees as troubling for the stock even though he is a fan of the products.
Spotify sticky subscription, winning label negotiations
Andrew has long been bullish on Spotify because it is a sticky, front-of-phone subscription with enormous daily listening hours. He reads the label renegotiations more bluntly than Simeon: Spotify now has the leverage because it owns the listener relationship and is less reliant on any single label, so the deals were Spotify winning outright, and he expects Spotify to take even more in the next round. Audiobooks and podcasts further strengthen its position.
Spotify is a quiet compounding margin story
Simeon's highest-conviction long is Spotify as a quiet compounder. He admits he underestimated it: the 2024-2025 label renegotiations improved Spotify's economics, with royalty rates that can fall as Spotify grows, and Spotify has regained bargaining leverage. Premium subscriptions are growing mid-teens, podcasts are no longer a money pit, audiobooks add incremental monetization, and AI is a net positive because Spotify has the rights/clearances and algorithmic distribution. With operating margins moving from roughly 14% toward 20% by 2030 and potentially 30% beyond, and earnings compounding around 20%, he sees 25%-35% upside just by rolling the multiple forward even without assuming major margin expansion.
Paramount makes uneconomic deals; avoid
Simeon criticizes Paramount as an uneconomic competitor that should not be in the media conversation. He says its UFC and other deals don't make sense, margins are not expanding, and it only remains relevant because the CEO has one of the world's richest fathers. That makes it an unattractive holding compared with better-run streaming assets.
Netflix cheap, expanding-margin global streaming winner
Simeon is bullish on Netflix as a value stock rather than a broken growth story. It is the only truly global streaming service besides YouTube, has unmatched scale in pricing content across a billion-plus users, and is focused on profitability while milking its existing library more efficiently. Revenue is growing low double digits, operating margins are in the low-to-mid 30s with a path to 40, and earnings can compound at high teens to 20%; he also sees optionality in bundling other services, sports rights, and eventually becoming an entertainment super app.
Netflix global scale and sports ratings moat
Andrew argues Netflix's global scale is an underappreciated moat: it can price content across more than a billion users while peers price against much smaller audiences, and it has repeatedly turned legacy content into hits. He also points to Netflix's NFL game drawing about 19 million viewers despite requiring a login, versus YouTube's free 17 million, as evidence that Netflix has unusual distribution power and can take sports/attention share.
Up Next
This Yet Another Value Podcast video, published September 18, 2026, features Simeon McMillan, Andrew Walker discussing NTDOY, SPOT, PSKY, NFLX. 7 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Simeon McMillan, Andrew Walker · Tickers: NTDOY, SPOT, PSKY, NFLX