Yesterday's news that Nintendo finally succumbed to pressure and decided to enter the smartphone gaming market have shaken things up quite nicely – the company’s shares rose an incredible 21 per cent.
As traders pounced with buy offers overwhelming sell offers, the shares changed hands at 17,080.0 yen (£95), up 21.3 per cent after hitting the daily stop limit of 3,000 yen (£16), Phys.org reports (opens in new tab).
It was the best closing price for the stock since June 2011.
The Japanese company announced (opens in new tab)on Tuesday that it had signed a deal with a mobile gaming firm, DeNA, with the intention of bringing its “iconic game characters” to phones and tablets via game apps.
Nintendo was being pressured to make this move since as far back as 2011 (quite possibly further), but has always held fast that it wanted to stick to its guns and not go across to the mobile side. That all appears to have changed now.
The company wants to buy 10 per cent of DeNa for 22 billion yen (£122 million), and the duo will bring Nintendo’s popular characters to smartphones.
Investors had been hoping Nintendo would venture into the expanding market but the company has - until now - stuck with a "consoles-only" policy, noted Kenji Shiomura, senior strategist at Daiwa Securities.
"Now they are finally stirring and... the market likes it," he said.
"Finally Nintendo has turned a corner and embraced a huge strategic shift," Atul Goyal, an analyst at Jefferies Group LLC in Singapore, said in a report, as he raised his recommendation on the stock to "buy".