Most investors are focused on the hugely popular Switch gaming console when it comes to Nintendo
At a time when many investors think the Japanese gaming company is basically abandoning the mobile market, Jefferies analyst Atual Goyal thinks it’s embarking on a evolving strategy in that important segment of the market. “Nintendo mobile game plan is changing / evolving (and will continue to evolve over next 2-3 years as it learns more): While most of the investors (we met on a recent roadshow) believed that Nintendo is slowing down / dialing down on mobile games), our meeting with Nintendo management convinced us that Nintendo is all the more committed to mobile-games,” wrote the analyst in a note to clients covered by Barron’s. (See also: Nintendo Ups Switch Production for the Holidays)
Since the launch of its latest gaming console, Nintendo has been enjoying a resurgence of sorts as consumers scramble to get their hands on the gaming machine. That has resulted in a surge in it’s stock price and bets that it is focused on that side of the market. But the Japanese company isn’t throwing in the towel in mobile gaming despite mixed results in the area.
In late May, the Wall Street Journal reported it was gearing up to launch a mobile version of its popular Legend of Zelda game. The fantasy title, which triggered a surge in Switch console sales when it was unveiled on the gaming platform, is likely to be released after Animal Crossing, although the Journal’s sources added that the timing and order of the launches might change. Animal Crossing, a life simulation game that involves taking on the role of a mayor in a town populated with anthropomorphic animals, is expected to be made available on smartphones in the latter half of 2017. In April, Nintendo CEO Tatsumi Kimishima confirmed the company plans to boost its mobile credentials by releasing between two to three new smartphone games in the financial year ending March 2018. The company’s shift away from developing games for its own hardware has already seen it launch Miitomo, Fire Emblem Heroes, Super Mario Run and Pokémon Go, which became the fastest mobile game to reach 10 million downloads last year. (See also: How Pokemon Go Uses Augmented Reality)
While Super Mario Run was expected to be a huge hit, the Jefferies analyst said it failed because it was priced on the higher end. Another mobile game, Fire Emblem, which Nintendo kept free, saw strong demand in the first month, but the analyst noted all of the content associated with the game was used up in less than month, hurting its popularity. As a result, Goyal said it’s just the beginning for Nintendo and that it is addressing pricing and content depth in subsequent mobile game launches. “We believe Nintendo’s mobile games will go from strength to strength,” wrote the analyst, noting the updates to Pokemon Go will be big test for the company’s gaming aspirations. “It will be a huge mistake to write off Nintendo’s IP. That is the real value. That is the treasure trove.” The analyst has a buy rating on shares of Nintendo.