Nintendo stock surges on Switch tie-up with Tencent in China

A person dressed as the Nintendo character Mario waves at a pop-up Nintendo venue in Madison Square Park, March 3, 2017 in fresh York City.

Drew Angerer | Getty Images

A person dressed as the Nintendo character Mario waves at a pop-up Nintendo venue in Madison Square Park, March 3, 2017 in fresh York City.

Nintendo shares surged on Friday after Tencent won approval to start selling the Japanese gaming giant’s Switch console in China.

At one point, shares were posting a gain of more than 16%, although they were trading at around 14% higher by the end of the day in Tokyo.

Regulators inside the southern Chinese province of Guangdong approved the Nintendo Switch as well as the game “fresh Super Mario Bros. U Deluxe” to be released in China.

Nintendo shares responded by hitting their highest level since an intra-day high on October 18, 2018.

Investors have been asking for a long time when Nintendo will enter the entire world’s largest gaming market as well as the tie-up with Tencent will be a welcome step, according to Daniel Ahmad, an analyst at Niko Partners. although, he warned, the market should not get too excited because Nintendo as well as Tencent will still need approval coming from more regulators inside the country.

“which is usually still very early inside the process. Therefore, we expect there to be some time before the console releases in China,” Ahmad said in a note on Thursday.

“Nintendo as well as Tencent will also need to submit each game for approval in China as well as ensure the games comply with content regulations. which too is usually a lengthy process as well as means which which will take some time before Nintendo can build up a large library of official games in China,” he added.