Nintendo: Mobile Games Announcement Gives NTDOY a 1-Up

Nintento announces partnership with mobile game developer

Much like Mario in a Tanooki suit, shares of Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) were just sent soaring. The makers of Mario have finally budged on their long-standing opposition to mobile gaming, which means we’ll be seeing Mario and friends on smart devices in the near future.


Sort of.

Here’s what’s actually happening: Nintendo is teaming with DeNA, a Japanese company that develops and promotes mobile games (and sometimes buys baseball teams) to bring Nintendo’s intellectual property to smart devices.

Critics have been calling for Nintendo mobile games for years — especially after the WiiU and 3DS systems stumbled out of the gate. “Dedicated video game systems are dying,” they say. “Mobile gaming is the future. Nintendo is doomed!” So Tuesday’s announcement seems to be an indication that Nintendo is finally getting with the times.

In the words of the company’s president, Satoru Iwata:

“Now that smart devices have grown to become the window for so many people to personally connect with society, it would be a waste not to use these devices.”

Nintendo Mobile Games Won’t Be Ports of Old Games

Don’t expect to see Super Mario Bros. 3 or The Legend of Zelda: A Link to the Past on your iPhone or Galaxy 6 anytime soon, though. Nintendo remains as protective of its brand as ever. Here’s what DeNA had to say about the Nintendo mobile games partnership:

“To ensure the quality of game experience that consumers expect from this alliance of Nintendo and DeNA, only new original games optimized for smart device functionality will be created, rather than porting games created specifically for the Wii U home console or the Nintendo 3DS portable system.”

The language in that statement suggests that, rather than creating Mario Bros. Mobile, we’ll probably see releases that resemble other popular mobile games, but with a Nintendo theme. Ars Technica points out that the recent 3DS puzzle title Pokemon Shuffle might be the kind of template we should expect.

Meanwhile, Nintendo could save the highest-quality titles for its own consoles, like the Wii U, the 3DS and the eventual NX, which was just announced.

If Nintendo does go down the “traditional mobile games, but with Nintendo characters” route, it benefits from getting its characters in front of significantly more eyes, while still being able to control the experience that gamers get in its core titles.

In other words: Play a Kirby version of Candy Crush Saga on your smartphone, then buy the new handheld system to play the latest Kirby platformer.

What This Does for NTDOY

What does this mean for Nintendo stock? Well, today’s move puts NTDOY up 40% for the year-to-date vs. a flat S&P 500. But now that the news has been priced in, the upside is unclear. We have no concrete timeline for when we can expect these Nintendo mobile games, so the market will have to sit, wait and speculate.

Is this the beginning of a brand-new Nintendo, or just the company hedging against the possible decline of video game systems? We won’t know until some of these mobile games are released, but today’s news certainly shows that Nintendo isn’t stubbornly blind to the trends around it. (Either that, or Iwata is setting up one hell of an April Fool’s joke.)

Nintendo has a long history of adapting its business to stay relevant. Let’s hope Nintendo mobile games are just the next piece in its continued evolution.

Adam Benjamin is an Assistant Editor at InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities … but he does own a ridiculous number of Pokemon games.

More From InvestorPlace

Article printed from InvestorPlace Media,

©2020 InvestorPlace Media, LLC