Nintendo’s share price has hit its highest point in seven years, thanks to booming sales of the new Switch, its hybrid between a traditional home console and a handheld gaming machine.
The company’s share price is up 102% year on year as the Switch looks set to be the company’s first bona fide hit since the Wii hit the shelves more than a decade ago.
The Japanese company has seen its share price rise to ¥31,880 (£220), pushing it beyond the short-lived investor frenzy that attended the Pokémon Go craze last year, to its highest point since April 2010.
Last July’s launch of Pokémon Go, a location-based augmented reality mobile game, saw Nintendo’s share price jump by 119% in a matter of days.
However, the stock tumbled again after investors realised that Pokémon Go had not been developed by Nintendo or its affiliate The Pokémon Company, but instead by the developer Niantic.
Nintendo, which had a small investment in Niantic, the San Francisco-based company spun out of Google, released a formal notice pointing out it was not making direct sales from Pokémon Go and hence would not be making a fortune from last summer’s worldwide craze.
Now Nintendo, which has struggled to compete in the games console market as Sony’s PlayStation and Microsoft’s Xbox dominate, has a hit on its hands.
Last month, Nintendo said it expected its new Switch console, which it launched on 3 March, to end an eight-year sales decline and double annual operating profit. The last time Nintendo saw sales growth was in March 2009.
The device, a hybrid that can be used either handheld or with a TV when in a dock, sold 2.74m units in its debut month, beating analysts’ expectations. It also shipped 2.76m copies of Switch’s flagship launch title, The Legend of Zelda: Breath of the Wild.
The console has sold out nearly everywhere since its release – there are even reports that in games-crazed Japan Nintendo has taken to selling just the cardboard box from the popular Splatoon 2 game and console bundle for about ¥540.
Tatsumi Kimishima, president of Nintendo, said that if the Switch hit its target of 10m sales by Christmas then it would be potentially heading towards the global success level of the Wii.
One of the bestselling consoles of all time, the Wii was launched in November 2006, selling 20m consoles in its first year and exceeding 100m over its lifetime.
Nintendo’s market capitalisation has hit ¥4.32tn, making it the 19th biggest listed company in Japan.
The company’s share price has also been boosted by investors pleased at Nintendo finally entering the massive mobile games market, a sector in which it had been reluctant to try its hand.
Earlier this month, reports emerged that it was looking to develop a mobile version of The Legend of Zelda, one of the console’s all-time hit franchises, which has had massive success already as a Switch game.
