It’s hard to avoid the rumors surrounding Apple (NASDAQ:AAPL) and how a Disney (NYSE:DIS) acquisition would pan out. Though there are many ways Disney could enhance Apple’s ecosystem, I’d argue that the iPhone maker would be better off buying Japanese video game maker Nintendo (OTC:NTDOY) to potentially jolt the iPhone and Vision Pro as it looks to move further into the gaming waters. Either way, I am bullish on Apple stock as shares cool for autumn.
Undoubtedly, there are some serious troubles at the House of Mouse right now. The stock is heavily discounted, now down around 60% from its all-time high hit back in 2021. Still, the $152 billion behemoth isn’t just too large to be an acquisition target (maybe except by titans like Apple), but there are too many moving parts to the business, and they don’t appear to be moving gracefully together these days.
Add succession issues into the equation, as CEO Bob Iger looks to turn the tides under yet another tenure, and it’s clear that Disney may not be the juiciest Apple (please forgive the pun) of Apple’s eye at this point in time.
Why Apple Probably Won’t Buy Disney in Whole
The Apple Vision Pro reveal gave a bit of time to Disney and its top boss, Bob Iger, to discuss the possibilities for Disney in the age of spatial computing. And while Disney’s streaming platform, deep library of content, and ESPN sports channel would fit well in the Apple TV+ arsenal, we can’t forget about the Theme Parks and Cruises business, which isn’t precisely within Apple’s circle of competence!
Even if bought Disney in whole, what would it do with parks? I’m not so sure it wants to get into that business. Though, I suppose anything is possible if the price is right.
Iger recently announced the firm’s intention to double down on its Parks business, which seems like a pretty wise move, given that it seems to need to do more to justify ticket price hikes. In any case, I wouldn’t get my hopes up for a Disney-Apple deal, as it doesn’t seem to make a lot of sense, in my humble opinion. However, I do think pursuing ESPN could prove wise, given how incredible the sports content looked on Vision Pro during its big reveal back in June.
Back to Nintendo. Nintendo seems to “rhyme” with Disney but in the world of video games. The company has a strong, time-tested library of content, characters, and expertise. And though it has Nintendo World theme parks, which recently opened in Universal Studios Hollywood earlier this year, I’d argue that parks are an incredibly small part of the overall pie, at least compared to Disney.
Video Gaming Could be More of a Game-Changer for Apple
I view gaming as an area that could mean the difference between a mild Vision Pro launch and a scorching hot one. Additionally, it’s hard to look past the graphical capabilities of the iPhone 15 Pro and iPhone 15 Pro Max. With console-worthy game titles (like Resident Evil 4 and Resident Evil Village) now playable on the iPhone 15, Apple seems to have advanced on the hardware front such that it now makes sense to double-down in the realm of triple-A gaming to make the most of the hardware.
Indeed, the latest line of console-grade games look impressive when played on the latest iPhone. However, there’s one small thing that could prevent the iPhone from eating into the share of the PC or console gaming market — a lack of titles.
Apple could acquire its way to solve the problem. Given that Nintendo has a ton of impressive family-friendly exclusives that we all know and love, I view Nintendo as the perfect piece to the puzzle.
It’s not just the iPhone that could be a disruptive triple-A gaming platform. The Vision Pro’s hardware looks to be best-in-class, but on the front of gaming, I’m sure you could give the edge to Meta Platforms (NASDAQ:META) and its Meta Quest 3 headset.
A recent FastCompany article I came across gave praise to Meta’s plan to beat Apple, noting that Meta’s offering is cheaper, faster, and more fun. In the power versus affordability debate, I think power wins every step of the way (one point for Apple Vision Pro). Still, at this juncture, it’s hard to deny that Meta’s offering looks more fun, given how much emphasis was placed on gaming. Apple has the power to change things, however, and all it could take is a few major partnerships or one big acquisition.
Is Apple Stock a Buy, According to Analysts?
On TipRanks, AAPL stock comes in as a Moderate Buy. Out of 29 analyst ratings, there are 20 Buys and nine Holds. The average Apple stock price target is $207.69, implying upside potential of 17%. Analyst price targets range from a low of $167.00 per share to a high of $240.00 per share.
The Bottom Line
Buying Disney would give Apple a nice edge as it continues investing in its Apple TV+ business. Still, I’d argue Nintendo would give the iPhone maker a better bang for its buck, as exclusive games and characters would enable the firm to better showcase the potential of its graphically-capable hardware.
Additionally, the only thing that may stop the Vision Pro from being a mainstream success may be how “fun” it is for users. Sure, its $3,500 sticker price is a shocker, but if it has some exclusive games on it, I’d bet a lot of people will be itching to get their hands on one anyway.
