Nintendo ($NTDOY) used to be the biggest video game company on the planet. Their iconic characters like Mario and Luigi were and still are as recognizable as the Coca-Cola logo. Nearly every family had a Nintendo console at one point. Even “playing Nintendo” was used a phrase used to describe playing video games in the same way we describe searching for something on the internet (or “googling.”)
Yet after some missteps in the last decade-plus, the Japanese game giant is no longer the company to beat. Microsoft and Sony, with their respective Xbox and PlayStation consoles, already beat the big N in sales and market share by following consumer trends. Nintendo, on the other hand, stuck to sales gimmicks, familiar franchises, and outdated marketing to sell consoles and games. This did not go well for the company’s last two consoles, and they’ve lagged behind since.
Now, Nintendo has an innovative new console out that consumers absolutely love. They also have a few mobile game titles on the two most popular smart phone operating systems, with more to come. The company is seeing an unusual resurgence after years of lagging behind, and they have only one thing to thank: Zelda.
Zelda is the reason for new Nintendo console purchases.
Nintendo’s Switch console isn’t as powerful as a PlayStation 4 or Xbox One. It doesn’t have Call of Duty, Overwatch, and other popular games that other platforms are privy to. Even after the console’s launch, most games available for the Nintendo Switch were released on previous platforms (including the Nintendo Wii U) or are not worth the $300+ price of entry.
When the company released the Switch, they released The Legend of Zelda: Breath of the Wild along with it. This new Zelda game, which garnered rave reviews from the video game press, made millions of video gamers worldwide drop $299 for the Switch console. The demand for the game and the system has been so high that the Switch is consistently sold out across the States. This will likely help Nintendo beat earnings estimates when they make their next quarterly earnings report.
Zelda is coming to mobile, too.
When Nintendo announced Super Mario Run, a Mario game on iOS, their stock went through the roof. Sure, that game didn’t do as well as people hoped. At the same time, it still brought in revenue that the company didn’t have before.
Today, the company announced they will make another mobile game, this time set in the Zelda universe. This didn’t send Nintendo’s stock soaring at Super Mario Run levels, but it did help them increase by nearly 0.9%. Investors believe that by learning from their mistakes with Mario Run and catering to Zelda fans, the company will be able to make more money in a new space for them. After all, those millions of people who paid to buy a Switch and a copy of Zelda will probably end up shelling out more for the new Zelda mobile game.
Zelda is propping up Nintendo’s stock, and Mario is about to help.
Breath of the Wild is arguably the only major new game worth buying for the Nintendo Switch. Despite this fact, people are still buying up as many Switches as possible. When the Zelda mobile game comes out, the company will likely see millions of dollars spent on the game or in-game purchases in the first hour of release.
Nintendo isn’t resting on their laurels. The company likely has more than just a Zelda game in the works for mobile devices. They also have a new Mario game coming out for the Switch later this year, which will drive more console purchases — if there are any left on shelves. If the company continues to stagger releases of tentpole titles and bring more of their properties to mobile devices, they could find themselves with the same market share percentage as Sony and Microsoft.
Should you buy Nintendo stock?
Nintendo’s stock is up 21.17% since the beginning of the year, and 93.71% in the last year. This means that the value of a single share of Nintendo stock almost doubled since last May.
If you’re passionate about video games and think Nintendo will continue to sell Switch consoles at record levels, you might want to think about investing in the company. If you think Nintendo’s approach to the mobile space will help them compete with the King.coms and Supercells of the world, be sure to do your research before you even consider investing. It’s worth noting that when you do invest, you’ll have to do so through a broker or brokerage that supports over-the-counter exchanges or the Tokyo Stock Exchange. Apps like Robinhood and a select few other brokerages only trade stocks listed on a major American index.
If you’re of the opinion that Nintendo will always be playing catchup to Sony and Microsoft, consider investing in those companies instead. These titans of industry make billions of dollars in other fields, not just video games. If the industry goes bell-up — which is pretty impossible right now — they’ll make up for the deficit with their other products.