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Since I'm long Nintendo I'm considering this myself, so I'll share the idea first. The biggest concern with Nintendo is that smartphones and tablets eat away at its base of gamers. This is particularly the case for Nintendo's portable offerings.

A potential way to hedge that risk is to take a partial (or full) offsetting short in GameStop. They are just as leveraged to physical sales of systems and titles, so as games move online they're just as at risk, but unlike Nintendo they don't have the balance sheet strength or the valuable brands and innovation behind them.

Just a thought....

Nathan
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