Nintendo Shows Why Moats Make Share Prices Rise

Great Oracles of Finance like Benjamin Graham, Warren Buffett, and Charlie Munger believe the companies that endure are the ones with moats. Just like its counterpart around a castle, a company's "moat" is a durable advantage that keeps competitors at bay.

Patents, brands, scale, distribution networks: all can be moats. But Japan is teaching us that some of the most powerful defenses come from intellectual property and consumer devotion.

Nintendo is a case in point. Many of its fans are loyalists who will line up for every console launch, even re-buying old games just to play them on a new device. That kind of devotion is a moat that competitors can only envy.

When Nintendo launched its new Switch 2 in the summer of 2025, it set records for the fastest-selling console in history.

It’s not the Switch 2 itself that’s going to drive earnings. It’s software sales, Nintendo online subscriptions, movie royalties and the opportunity for theme parks to become something bigger.
— Michael Pachter

This quote from Pachter, an analyst at Wedbush Securities, explains why Nintendo shares have been up by as much as 14% and Sony Group Corp.'s by 8.6%, hitting new highs. A moat like this takes years to build. Once in place, it gives investors peace of mind.

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