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Nintendo And DeNA Value Skyrocket Following Mobile Partnership Announcement

by Mike Futter on Mar 24, 2015 at 05:07 AM

Nintendo investors are signaling their satisfaction with the company. Last week, the House of Mario announced a partnership with mobile giant DeNA (pronounced D-N-A) to create new mobile titles. The stock market is giving the deal the equivalent of a standing ovation.

The deal was announced at 4 a.m. Eastern on Tuesday, March 17, which corresponds to the close of the Japanese markets. Here’s what the share value chart looks like before and after the deal:

Click to enlarge.

Prior to the announcement of the DeNA deal, Nintendo was trading at approximately ¥14,080 ($117.45) per share. Prices jumped to ¥20,010 ($166.92) after the press conference. While things have since cooled off a bit, with shares now at ¥17,940 ($149.65), the news is being received well. 

DeNA has also benefitted from its new relationship. Prior to the announcement, shares were trading at ¥1,407 ($11.74). At the time of publication, those shares are valued at ¥2,139 ($17.84).

The share increase represents total new value of $3.81 billion for Nintendo and $796 million for DeNA. Between the two, increased value totals $4.6 billion.

We’ll continue to watch where share prices go, especially as we are one week from the close of Nintendo’s fiscal year. While it’s possible that some negative news could erode these gains, investors seem confident about Nintendo’s future in the mobile space.

[Source: Google Finance (1), (2) via PocketGamer]

 

Our Take
Nintendo has been listening to investors ask for entry into the mobile market for years. I wholeheartedly agree that a failed entry could erode the value of the IP. Nintendo took the smart path and found a partner and set up some ground rules to protect its characters and its existing business.

I’m eager to see what comes out of the partnership with DeNA, especially if the membership service corrects one of Nintendo’s biggest problems. Moving software licensing to an account-based system is long overdue.