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Nintendo Partners Tencent to Boost China Video Game Footprint

Nintendo (NTDOY) enters into partnership with Tencent to sell Switch consoles and gain foothold in China. Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Nintendo NTDOY recently announced that it has teamed up with Tencent Holdings TCEHY to sell the Switch console in China, beginning Dec 10.” data-reactid=”11″>Nintendo NTDOY recently announced that it has teamed up with Tencent Holdings TCEHY to sell the Switch console in China, beginning Dec 10.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Per Bloomberg report, Switch will sell for 2,099 yuan ($297), almost the same as elsewhere in the world. Moreover, Super Mario Bros. U Deluxe, Mario Kart 8 Deluxe and Mario Odyssey will be the Switch titles initially available to Chinese video game consumers in the coming weeks.
Nintendo is also preparing to launch Switch Lite, a cheaper version of the console, in China at a later date.” data-reactid=”12″>Per Bloomberg report, Switch will sell for 2,099 yuan ($297), almost the same as elsewhere in the world. Moreover, Super Mario Bros. U Deluxe, Mario Kart 8 Deluxe and Mario Odyssey will be the Switch titles initially available to Chinese video game consumers in the coming weeks.
Nintendo is also preparing to launch Switch Lite, a cheaper version of the console, in China at a later date.

Moreover, Nintendo and Tencent are collaborating to localize the hugely popular Zelda: Breath of the Wild and Pokemon: Lets Go titles in China.

Tencent is also working with international developers and studios as well as a Chinese indie developer to introduce more third-party titles for the Switch. This is expected to further increase the appeal of the console in China.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Nintendo Co. Price and Consensus” data-reactid=”15″>Nintendo Co. Price and Consensus

Nintendo Co. Price and Consensus

Nintendo Co. price-consensus-chart | Nintendo Co. Quote

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Will China Push Boost Nintendo’s Top Line?” data-reactid=”28″>Will China Push Boost Nintendo’s Top Line?

Notably, Tencent dominates the video gaming space in China. Per Gamma Data (CNG), games published by Tencent account for more than half of the entire Chinese market. Hence, the partnership is likely to help Nintendo gain a foothold in China, the world’s largest gaming market.

Per Niko, the Chinese console gaming industry generated $761.7 million in revenues in 2018, which is expected to grow by 11% by the end of this year. Further, the launch of Switch and new consoles from Microsoft MSFT and Sony SNE are expected to double total console hardware and TV and console game software sales to $1.5 billion by 2023.

Additionally, Switch continues to enjoy strong popularity with lifetime sales of 41.67 million units. Notably, in third quarter 2019, Nintendo earned ¥252.9 billion (93% of total revenues) just from the sale of Switch consoles.

Nevertheless, Nintendo is expected to face significant competition from Microsoft and Sony, two well-established console players in the China market. Per Statcounter, Sony and Microsoft have a market share of 64.2% and 29.2% respectively, while Nintendo’s share is 6.6% in China.

Moreover, the rise of smartphones as the dominant gaming platform in China is expected to dampen Nintendo’s sales. Gamers might also be reluctant to buy the console as the number of games approved by China’s government on the platform is limited.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Zacks Rank” data-reactid=”34″>Zacks Rank

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Currently, Nintendo carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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See these time-sensitive tickers now &gt;&gt;” data-reactid=”35″>Currently, Nintendo carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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See these time-sensitive tickers now >>

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="
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Nintendo Co. (NTDOY) : Free Stock Analysis Report
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Zacks Investment Research” data-reactid=”36″>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Tencent Holding Ltd. (TCEHY) : Free Stock Analysis Report
 
Sony Corporation (SNE) : Free Stock Analysis Report
 
Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
Nintendo Co. (NTDOY) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

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