Gaming Consoles Part 3: Nintendo

Sector

Gaming

Background

Ryan O'Connor is the founder of Crossroads Capital. We cover the modern history of Nintendo consoles that started with the NES, what drives consumers to choose the Switch platform over PlayStation and Xbox, and the opportunities to monetize Nintendo's incredible catalog of IP beyond the world of gaming.

Cover

Date

January 17, 2025

Episode Number

203

Background / Overview

Nintendo, founded on September 23, 1889, is a 130-year-old Japanese company with a storied history. Originally a playing card manufacturer supplying Yakuza clientele, it evolved through various ventures—such as toys and arcade games—before becoming a global leader in video game consoles and software. The company’s transformation from a cyclical, hardware-driven business to a stable, software-centric growth engine is a hallmark of its modern strategy. Nintendo is headquartered in Kyoto, Japan, and operates in the consumer entertainment industry, with a focus on video game consoles, proprietary software, and intellectual property (IP) monetization.

Key milestones include:

• 1970s-1980s: Transitioned from arcade games to home consoles with the launch of the Nintendo Entertainment System (NES) in 1985, reviving the video game industry post the 1983 crash.
• 2017: Launched the Nintendo Switch, a hybrid home-portable console, marking a shift to an iterative hardware model inspired by Apple’s ecosystem approach.
• Recent Years: Expanded IP monetization through movies, theme parks, and merchandise, leveraging its iconic franchises like Mario, Zelda, and Pokémon.

Nintendo’s business is characterized by its family-friendly brand, unparalleled IP portfolio, and a focus on intergenerational appeal. It employs thousands globally, though specific FTE figures are not provided in the transcript.

Ownership / Fundraising / Recent Valuation

Nintendo is a publicly traded company listed on the Tokyo Stock Exchange (7974.T). The transcript does not provide details on recent ownership changes, private equity involvement, or specific enterprise value (EV) transactions. However, it notes that Nintendo has bought back approximately 11% of its equity over the past decade, indicating a shareholder-friendly capital allocation strategy. The company maintains a robust balance sheet with significant cash reserves, diversified by currency, and “hidden balance sheet assets,” though exact figures are not specified.

Valuation context is implied through the discussion of Nintendo’s IP and movie business, which alone is estimated to be worth $20-50 billion, suggesting a significant portion of the company’s market cap is tied to non-core video game segments. The transcript does not provide a current market cap or EV/EBITDA multiple, but the historical stock performance around console launches (200% average gain over three years) suggests market enthusiasm for new hardware cycles.

Key Products / Services / Value Proposition

Nintendo’s core offerings are divided into hardware, software, and IP monetization, each with distinct value propositions:

1. Nintendo Switch (Hardware):
• Description: A hybrid console that functions as both a home and portable gaming device, launched in 2017. The upcoming Switch 2 (expected post-2025) will feature advanced Nvidia DLSS AI technology for enhanced graphics and performance.
• Value Proposition: Offers flexibility (home/portable), backward compatibility, and iterative upgrades, ensuring the installed base does not reset. The Switch 2 will support AAA third-party games, expanding its appeal.
• Revenue Contribution: Historically 50% of revenue, now ~40% as software grows. Hardware is profitable, unlike competitors Sony and Microsoft, who often sell consoles at a loss.
2. First-Party Software (Video Games):
• Description: Iconic titles like Super Mario, The Legend of Zelda, Metroid, and Yoshi, developed in-house. Games are sold as one-time purchases (~$60) with downloadable content (DLC) and in-game monetization (e.g., character skins).
• Value Proposition: High-quality gameplay, evergreen appeal, and intergenerational nostalgia. Titles consistently score above 85 on Metascore, reflecting superior quality.
• Revenue Contribution: ~60% of revenue, with a growing share due to digital distribution (50% of software sales, targeting 85%). DLC and in-game purchases create recurring revenue streams.
3. Nintendo Switch Online (NSO):
• Description: A subscription service offering online multiplayer, access to a catalog of retro games (NES, SNES, N64, etc.), and exclusive content like battle royale games.
• Value Proposition: Affordable (~$20/year vs. Microsoft’s Game Pass at ~$120/year), leveraging nostalgia with evergreen titles and enhancing engagement through online play.
• Revenue Contribution: Growing rapidly, with membership compounding at 25% annually since 2017. A key driver of recurring revenue.
4. IP Monetization (Movies, Theme Parks, Merchandise):
• Description: Includes the “Super Mario Brothers” movie (170 million viewers), upcoming Zelda films, Universal theme park attractions, and merchandise like Nintendo LEGO sets.
• Value Proposition: Amplifies brand recognition, drives console/software sales (e.g., 50% increase in Mario title sales post-movie), and generates high-margin revenue.
• Revenue Contribution: A new earnings engine, potentially worth $20-50 billion standalone. Movies are highly profitable due to partnerships with capital-efficient studios like Illumination.

Table: Key Products/Services Overview

Segments and Revenue Model

Nintendo operates in two primary economic segments, with IP monetization as an emerging third pillar:

1. Hardware: Sales of Switch consoles, profitable at ~$300/unit.
2. Software/Services: First-party game sales, third-party game royalties (30% “app store” tax), NSO subscriptions, DLC, and in-game monetization.
3. IP Monetization: Revenue from movies, theme parks, and merchandise licensing.

Revenue Model:

• Hardware: One-time sales of consoles, with profitability driven by economies of scale and iterative upgrades (e.g., Switch 2 enhances old games via AI).
• Software: One-time game purchases (~$60) dominate, but digital sales (50%, targeting 85%) and DLC/in-game purchases create recurring revenue. Third-party games generate a 30% royalty, akin to Apple’s App Store model.
• NSO: Subscription-based (~$20/year), offering online play and retro games, with 25% annual membership growth.
• IP Monetization: High-margin revenue from movie box office receipts, digital streaming, theme park royalties, and merchandise sales.

Key Dynamics:

• Shift to Digital: Digital software sales (50% of total, growing to 85%) have 80-90% gross margins vs. 45-50% for physical sales, boosting profitability.
• Iterative Hardware Model: Inspired by Apple, the Switch ecosystem ensures backward compatibility, preventing the installed base from resetting (unlike pre-2017 cycles). This stabilizes revenue and reduces cyclicality.
• Third-Party Ecosystem: Investments in developer tools (e.g., Unity/Unreal support, affordable dev kits at ~$500-1000) and online infrastructure have grown third-party titles at 40% CAGR, with 11,000 titles on Switch.
• IP Flywheel: Movies and theme parks enhance brand equity, driving console and game sales (e.g., 50% Mario sales uplift post-movie).

Splits and Mix

Revenue Mix:

• Hardware vs. Software: Historically 50-50, now 60% software/40% hardware, projected to reach 80% software/20% hardware.
• Digital vs. Physical Software: ~50% digital, expected to reach 85%, driven by consumer convenience and higher margins.
• First-Party vs. Third-Party Software: First-party dominates, but third-party titles (11,000, 40% CAGR) are growing, especially with Switch 2’s AAA game support.
• NSO: Small but growing, with 25% membership CAGR.
• IP Monetization: Emerging, potentially a third of enterprise value.

EBITDA Mix:

• Software and NSO contribute higher margins (80-90% gross) vs. hardware (lower, but profitable). IP monetization is high-margin due to low incremental costs.
• The shift to digital and recurring revenue (NSO, DLC) drives EBITDA margin expansion from mid-single digits (pre-2017) to mid-30s today, potentially exceeding 50% in 2-3 years.

Geographic Mix:

• Not detailed in the transcript, but Japan and North America are key markets. Nintendo’s family-friendly IP has global appeal, with strong penetration in Western and Asian markets.

Customer Mix:

• Broad demographic, spanning ages 4-50. Nintendo targets younger gamers (4-12) with titles like Yoshi and Super Mario Wonder, while retaining 30-50-year-olds via nostalgia. Competitors (Sony, Microsoft) focus on 30-50-year-olds, conceding the kids’ market.

End-Market Mix:

• Primarily consumer entertainment (video games), with growing exposure to movies, theme parks, and merchandise.

Mix Shifts:

• Digital Growth: Accelerating shift to digital (50% to 85%) increases margins and recurring revenue.
• Third-Party Expansion: Switch 2’s AAA game support will boost third-party revenue, reducing reliance on first-party titles.
• IP Monetization: Movies and theme parks are becoming significant, with a planned Nintendo Cinematic Universe (NCU) releasing one film annually.

KPIs

• Installed Base: ~140 million Switch units sold, never resetting due to iterative model.
• Active Player Base: Largest in the industry, compounding at 30% annually since 2017.
• NSO Membership: Compounding at 25% annually.
• Digital Software Sales: ~50% of total, compounding at 50% annually.
• Third-Party Titles: 11,000 titles, compounding at 40% annually.
• Software Ratings: Metascore >85 for most first-party titles, reflecting quality.
• IP Engagement: 170 million “Super Mario Brothers” movie viewers, 50% uplift in Mario game sales post-movie.

Trends:

• Acceleration in digital sales, NSO membership, and third-party engagement.
• Stable hardware sales with potential growth from Switch 2.
• Growing IP monetization, with movies and theme parks driving brand equity.

Headline Financials

Revenue:

• Not explicitly quantified, but software (60%) and hardware (40%) are primary drivers. Historical 50-50 mix has shifted, with software growing faster due to digital sales (50% CAGR) and NSO (25% CAGR).
• IP monetization is a new revenue stream, with movies and theme parks contributing significantly.

EBITDA:

• Operating margin expanded from mid-single digits (pre-2017) to mid-30s today, driven by:
• Digital software (80-90% gross margin vs. 45-50% physical).
• NSO and DLC recurring revenue.
• Profitable hardware sales.
• Potential to exceed 50% in 2-3 years as digital mix approaches 85%.

Free Cash Flow (FCF):

• Improved significantly due to:
• Higher EBITDA margins from digital shift.
• Lower capital intensity (iterative hardware reduces R&D spikes).
• Stable cash conversion as physical distribution costs decline.
• Historical cyclicality (losses during console transitions) eliminated by iterative model.

Capital Intensity:

• Declining due to iterative hardware (no need for entirely new platforms every 5-6 years).
• Investments in online infrastructure (dedicated servers) and developer tools are front-loaded but yield long-term returns.
• Movie and theme park partnerships (e.g., Illumination, Universal) are capital-efficient, leveraging external expertise.

Table: Headline Financials (Estimated Trends)

Long-Term Trends:

• Revenue growth driven by digital sales, NSO, and IP monetization.
• EBITDA margin expansion from operating leverage (fixed costs spread over growing digital revenue).
• FCF growth as capital intensity declines and cash conversion improves.

Value Chain Position

Nintendo operates midstream in the video game value chain, between upstream chip suppliers (e.g., Nvidia) and downstream retailers (e.g., Best Buy, Walmart). Its primary activities include:

• R&D: Designing consoles and developing first-party software.
• Manufacturing: Producing Switch hardware (profitable, unlike competitors).
• Distribution: Digital (eShop, 80-90% margin) and physical (retail, 45-50% margin).
• Marketing: Leveraging IP (movies, theme parks) to drive brand equity.
• Sales: Direct-to-consumer (digital) and via retailers (physical).

Go-To-Market (GTM) Strategy:

• Hardware: Sold through retailers and online, positioned as a family-friendly, hybrid device.
• Software: eShop for digital sales (50%, growing to 85%), physical sales via retailers. NSO subscriptions enhance engagement.
• IP Monetization: Partnerships with Universal, Illumination, and Sony for movies and theme parks, plus merchandise licensing.

Competitive Advantage:

• IP: Unrivaled portfolio (Mario, Zelda, Pokémon) with intergenerational appeal.
• Ecosystem: Iterative hardware and backward compatibility create a sticky installed base.
• Quality Control: Historical “Nintendo Seal of Quality” and modern developer support ensure high-quality games.

Customers and Suppliers

Customers:

• Demographics: Ages 4-50, with a focus on kids (4-12) and nostalgic adults (30-50). Competitors target older gamers, ceding the kids’ market.
• Behavior: Value gameplay over graphics, seek family-friendly experiences, and engage with IP via movies and merchandise.
• Retention: High due to IP loyalty, backward compatibility, and NSO’s retro catalog.

Suppliers:

• Key Partners: Nvidia (Switch 2 chips with DLSS AI), Universal/Illumination (movies), third-party developers (11,000 titles).
• Dependency: Low supplier power due to Nintendo’s scale and proprietary ecosystem. Third-party developers rely on Nintendo’s platform for access to its large installed base.

Pricing

• Hardware: ~$300/unit, profitable, with stable pricing due to iterative model.
• Software: ~$60/game (one-time), $5-10/DLC, $20/year for NSO. Digital sales eliminate retailer margins, boosting profitability.
• IP Monetization: Movie tickets (~$10-15), theme park royalties, and merchandise vary by market.
• Drivers: Pricing is driven by IP strength, brand reputation, and mission-criticality (e.g., exclusive Mario/Zelda titles). Digital distribution enhances consumer surplus (convenience, instant access).

Contract Structure:

• Third-party developers pay a 30% royalty for eShop sales, akin to Apple’s App Store.
• NSO subscriptions are annual, with high renewal rates due to retro game access.
• Movie/theme park deals are partnership-based, with Nintendo sharing profits but retaining IP control.

Bottoms-Up Drivers

Revenue Model & Drivers

How Nintendo Makes $1:

• Hardware ($0.40): Selling a Switch at ~$300, profitable but lower margin than software.
• Software ($0.60):
• First-party games (~$60, 80-90% margin digital, 45-50% physical).
• Third-party royalties (30% of ~$60/game).
• DLC/in-game purchases ($5-10, high margin).
• NSO: ~$20/year subscription, growing at 25% CAGR.
• IP Monetization: Movie tickets, theme park royalties, merchandise (high margin).

Volume Drivers:

• Installed Base: ~140 million Switch units, growing with Switch 2’s AAA game support.
• Active Users: Compounding at 30% annually, driven by intergenerational appeal.
• Third-Party Titles: 11,000 titles, 40% CAGR, with AAA games boosting Switch 2 sales.
• IP Engagement: 170 million movie viewers, driving game sales (e.g., 50% Mario uplift).

Pricing Drivers:

• IP Strength: Exclusive titles command premium pricing.
• Digital Convenience: Pre-downloads and instant access increase willingness to pay.
• Brand Reputation: Nintendo’s family-friendly image supports stable pricing.

Mix Drivers:

• Digital Shift: 50% to 85% digital sales increases margins.
• Third-Party Growth: AAA games on Switch 2 diversify revenue.
• IP Monetization: Movies and theme parks add high-margin streams.

Organic vs. Inorganic:

• Organic growth from digital sales, NSO, and IP monetization.
• Inorganic growth limited; no major M&A discussed, but partnerships (e.g., Illumination) are key.

Cost Structure & Drivers

Cost Breakdown:

• Variable Costs:
• COGS (Hardware): Manufacturing consoles, moderate due to economies of scale.
• COGS (Physical Software): Production and retailer margins (45-50% gross margin).
• Developer Costs: First-party game development (~$50-100 million/title vs. $300 million for competitors).
• Fixed Costs:
• R&D: Hardware iteration and software development, lower than pre-2017 due to unified ecosystem.
• Online Infrastructure: Dedicated servers for NSO and multiplayer.
• Marketing: IP promotion via movies, theme parks, and merchandise.
• Overhead: Admin, facilities, and global operations.

Cost Dynamics:

• Operating Leverage: Fixed costs (R&D, servers) are spread over growing digital revenue, driving margin expansion.
• Digital Shift: Eliminates physical production and retailer margins, boosting gross margins to 80-90%.
• Capital Efficiency: Partnerships (e.g., Illumination) reduce movie/theme park costs.

EBITDA Margin:

• Mid-30s today, up from mid-single digits, with potential to exceed 50% as digital mix grows.
• Incremental margins improve with scale, as fixed costs remain stable.

FCF Drivers

• Net Income: Rising due to EBITDA growth (mid-30s margins).
• Capex: Moderate, focused on iterative hardware and online infrastructure. Lower than pre-2017 console cycles.
• NWC: Stable, with digital sales reducing inventory and receivables cycles.
• Cash Conversion: Improving as physical distribution costs decline and digital revenue grows.

Capital Deployment

• Buybacks: ~11% of equity repurchased over 10 years, paused recently for Switch 2 investment. Expected to resume post-launch.
• Dividends: Increasing, supported by growing cash reserves.
• M&A: Limited; focus on organic growth and partnerships (e.g., Universal, Illumination).
• R&D: Investments in online infrastructure, developer tools, and IP monetization yield high returns.

Market, Competitive Landscape, Strategy

Market Size and Growth

• Video Game Industry:
• Size: Hundreds of billions globally, with consoles ($50 billion), software ($100 billion), and mobile gaming (~$90 billion).
• Growth: ~5-7% CAGR, driven by digital distribution, subscriptions, and emerging markets.
• Nintendo’s Segment: Console hardware (~140 million Switch units) and software (first-party + third-party royalties).
• IP Monetization:
• Movies: Global box office ~$30 billion, with Nintendo’s NCU targeting ~$1 billion/film annually.
• Theme Parks: Growing, with Universal’s Nintendo attractions driving tourism revenue.

Growth Drivers:

• Volume: Rising installed base (140 million+) and active users (30% CAGR).
• Price: Stable game pricing (~$60), with NSO subscriptions adding recurring revenue.
• Mix Shift: Digital (50% to 85%) and IP monetization increase profitability.

Market Structure

• Consolidated: Three major players (Nintendo, Sony, Microsoft), with Nintendo leading in installed base and family-friendly appeal.
• MES (Minimum Efficient Scale): High due to R&D and IP development costs, favoring large players like Nintendo.
• Competitor Dynamics:
• Sony: Focuses on AAA games, high-cost development ($300 million/title), struggling with PS5 software profitability.
• Microsoft: Xbox in decline, shifting to multiplatform software and Game Pass.
• Mobile: Roblox and Minecraft compete for younger gamers, but Nintendo’s new MMO aims to counter this.

Competitive Positioning

• Nintendo’s Niche: Family-friendly, gameplay-focused consoles with iconic IP. Switch 2’s AAA game support bridges the gap with Sony/Microsoft.
• Matrix Positioning: Mid-tier hardware power, premium IP, and affordable pricing ($300 vs. $500 for PS5/Xbox).
• Risk of Disintermediation: Low due to proprietary IP and ecosystem lock-in.

Market Share & Relative Growth

• Market Share: 90% in the early 1990s (NES era), now a leader in installed base (140 million Switch units vs. ~50 million PS5/Xbox Series X).
• Growth: Outpacing market due to digital shift (50% CAGR), NSO (25% CAGR), and IP monetization.

Hamilton’s 7 Powers Analysis

1. Economies of Scale:
• Strength: High. Nintendo’s large installed base (140 million) and digital distribution reduce per-unit costs. Fixed costs (R&D, servers) are spread over growing revenue.
• Impact: Drives operating leverage, with margins expanding to mid-30s and potentially >50%.
2. Network Effects:
• Strength: Moderate. NSO’s multiplayer and retro catalog create user stickiness, but not as strong as social platforms.
• Impact: Enhances retention, with 25% membership CAGR.
3. Branding:
• Strength: Exceptional. Nintendo’s family-friendly IP (Mario, Zelda) commands premium pricing and loyalty across generations.
• Impact: Drives game sales and IP monetization (e.g., 170 million movie viewers).
4. Counter-Positioning:
• Strength: Strong. Nintendo’s hybrid console and gameplay focus differentiate it from Sony/Microsoft’s graphics-driven approach.
• Impact: Captures kids’ market and nostalgic adults, ceded by competitors.
5. Cornered Resource:
• Strength: Exceptional. Proprietary IP (Mario, Zelda, Pokémon) is unmatched, with 10+ franchises valued as billion-dollar blockbusters.
• Impact: Ensures exclusivity and high margins.
6. Process Power:
• Strength: Strong. Quality control (e.g., “Nintendo Seal of Quality”) and developer support (Unity/Unreal, affordable dev kits) ensure superior games.
• Impact: High Metascore (>85) and 40% third-party title growth.
7. Switching Costs:
• Strength: High. Backward compatibility and digital purchases lock users into the Switch ecosystem.
• Impact: Prevents installed base reset, stabilizing revenue.

Summary: Nintendo’s strongest powers are branding, cornered resource, and switching costs, driven by its IP and ecosystem. Economies of scale and counter-positioning further solidify its moat, while network effects and process power are supportive but less dominant.

Strategic Logic

• Iterative Hardware: Eliminates cyclicality, stabilizes revenue, and leverages Apple’s ecosystem model.
• IP Monetization: NCU and theme parks create a flywheel, boosting brand equity and game sales.
• Third-Party Expansion: Switch 2’s AAA game support diversifies revenue and attracts new users.
• Capital Allocation: Conservative but improving, with buybacks (11% equity) and dividends resuming post-Switch 2.
• Risk Mitigation: Focus on quality control and IP protection avoids Disney-like missteps (e.g., Star Wars).

Valuation Context

• Implied Value: IP monetization (movies, theme parks) estimated at $20-50 billion, potentially a third to half of Nintendo’s market cap.
• Historical Performance: ~200% stock gain over three years around console launches, reflecting market enthusiasm for new hardware.
• Current Drivers:
• EBITDA margin expansion (mid-30s to >50%).
• FCF growth from digital shift and lower capital intensity.
• IP monetization as a new earnings engine.
• Risks:
• Reversion to insular strategy (e.g., halting IP monetization).
• Switch 2 failure (low probability, given 90 million unit floor historically).
• Competitive pressure from mobile (Roblox, Minecraft), mitigated by Nintendo’s new MMO.

Key Takeaways and Unique Dynamics

1. Iterative Hardware Model:
• Uniqueness: Inspired by Apple, the Switch ecosystem ensures backward compatibility, preventing the installed base (~140 million) from resetting. This eliminates historical cyclicality (3-4 years of profits, 1-2 years of losses).
• Impact: Stabilizes revenue, reduces R&D spikes, and drives FCF growth. Switch 2’s Nvidia DLSS AI enhances old games, boosting consumer value.
2. Digital-First Software:
• Uniqueness: Shift from 50% to 85% digital sales increases gross margins from 45-50% (physical) to 80-90% (digital). DLC and in-game monetization create recurring revenue, unlike one-time purchases.
• Impact: Drives EBITDA margin expansion (mid-30s to >50%) and FCF growth. Consumer convenience (pre-downloads, instant access) accelerates adoption.
3. Third-Party Ecosystem:
• Uniqueness: Investments in developer tools (Unity/Unreal, ~$500-1000 dev kits) and online infrastructure have grown third-party titles at 40% CAGR (11,000 titles). Switch 2’s AAA game support bridges the gap with Sony/Microsoft.
• Impact: Diversifies revenue, reduces reliance on first-party titles, and leverages the 30% “app store” royalty model.
4. IP Monetization Flywheel:
• Uniqueness: The Nintendo Cinematic Universe (NCU), theme parks, and merchandise leverage iconic IP (Mario, Zelda) to drive brand equity and game sales (e.g., 50% Mario uplift post-movie). Partnerships with Illumination and Universal ensure capital efficiency.
• Impact: Creates a new high-margin earnings engine ($20-50 billion standalone), enhancing long-term profitability.
5. Intergenerational Appeal:
• Uniqueness: Nintendo targets kids (4-12) and nostalgic adults (30-50), ceded by competitors. Games like Yoshi and Super Mario Wonder, plus NSO’s retro catalog, ensure broad appeal.
• Impact: Sustains installed base growth (30% CAGR) and customer retention.
6. Capital Allocation:
• Uniqueness: Conservative but improving, with 11% equity buybacks and growing dividends. Japan’s regulatory push for better capital efficiency supports shareholder-friendly policies.
• Impact: Enhances ROE and supports valuation growth.

Standout Insights:

• Weaponized Nostalgia: Nintendo’s ability to monetize nostalgia through NSO’s retro games and IP-driven movies/theme parks is a unique strength, creating emotional loyalty unmatched by competitors.
• Quality Control Legacy: The “Nintendo Seal of Quality” (1985) and modern developer support ensure high-quality games, maintaining consumer trust and driving sales.
• Switch 2’s Potential: By supporting AAA third-party games, Nintendo can capture a broader market, potentially doubling software revenue and margins.

Conclusion

Nintendo’s business model has transformed from a cyclical, hardware-driven operation to a stable, software-centric growth engine. The iterative Switch ecosystem, digital-first software, third-party expansion, and IP monetization create a flywheel of revenue growth, margin expansion, and FCF generation. Its unparalleled IP portfolio, intergenerational appeal, and quality control provide a durable competitive moat, as evidenced by Hamilton’s 7 Powers. With EBITDA margins approaching 50% and a growing IP monetization pillar ($20-50 billion), Nintendo is well-positioned for sustained growth, provided it avoids reverting to insularity. The Switch 2 and NCU will be critical catalysts, reinforcing Nintendo’s status as a secular growth juggernaut in the entertainment industry.

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