Nintendo stock scores 9-year-high after Tencent deal
By Takashi Mochizuki and Alyssa Abkowitz
Prospect of China expansion excites investors
For all its global popularity, Nintendo Co. has had relatively limited business in China. Now, a deal with Tencent Holdings Ltd. has investors excited at the prospect of the Japanese company's Switch console and smartphone games taking off in one of the world's biggest game markets.
Nintendo (7974.TO) shares shot up 7.1% to a nine-year high Tuesday on word that one of China's most popular videogames -- Tencent's "Honor of Kings" -- will be available on the Switch this winter. The game is called "Arena of Valor" in Europe, where it was introduced in August; a U.S. launch under that name is set for later this year.
For the moment, the deal, disclosed last week in a Nintendo video posted online, doesn't directly involve users in China because the Switch isn't sold there. But it could be a precursor to arrangements allowing Nintendo to sell the Switch and its mobile games in China, said people familiar with the thinking of Nintendo and Tencent (0700.HK) executives.
"This is very positive in the longer term in getting Chinese publishers supporting the Switch," said Macquarie Capital Securities analyst David Gibson. He expects Nintendo to introduce the Switch in China by March 2019.
An expanded version of this report appears on WSJ.com (https://www.wsj.com/articles/nintendo-deal-with-tencent-paves-way-for-china-push-1505825294?mod=mktw).
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