Nintendo Shares Skyrocket After Partnering Up With Tencent
Author By Sophia VidaPosted on Shares of game console legend maker Nintendo were soaring as much as over 16% after traders learned that the company has partnered up with Tencent to sell its Switch consoles in China.
China is the world’s largest gaming market and selling the Japanese gaming company’s console could be a huge victory.
Analysts however have said there are regulatory hurdles to still overcome and that the console wouldn’t be available right away.
Regulators in the southern Chinese province of Guangdong approved the Nintendo Switch and the game “New Super Mario Bros. U Deluxe.”
Niko Partners analyst Ddaniel Ahmad has said investors have been asking for awhile when the company would sell its stuff in China.
“This is still very early in the process. Therefore, we expect there to be some time before the console releases in China,” Ahmad remarked.
“Nintendo and Tencent will also need to submit each game for approval in China and ensure the games comply with content regulations. This too is a lengthy process and means that it will take some time before Nintendo can build up a large library of official games in China,” he also said.
“Nintendo has yet to launch any of its mobile games in China and we believe that the potential of Nintendo’s mobile game business in China is significantly larger than its console business,” Ahmad added.
Consoles in China had been banned for 14 years before the ban was lifted in 2014.
“Nintendo sits on the gaming world’s most valuable and unique IP (intellectual property) treasure trove,” said Serkan Toto to CNBC. Toto is the CEO of game industry consultancy Kantan Games.
“The game portfolio is totally different from Sony and Microsoft, which appeal to hardcore gamers — who in China play on the PC. The Switch is a portable device, which fits nicely with Chinese users’ penchant for gaming on the go,” he added.
Nintendo shares are up about 36% this year.
Disclaimer: We have no position in NINTENDO LTD/ADR (OTCMKTS: NTDOY) and have not been compensated for this article.
