(March 13): Nintendo Co is headed for its biggest weekly gain in a decade with a US$14 billion ($17.9 billion) jump in value propelled by surprise global smash hit Pokémon Pokopia.
Released on March 5, the new game accrued 2.2 million sales over its first four days and earned rave reviews by fans online. It blends Pokémon characters and lore with gameplay akin to Animal Crossing, emphasising what’s known as a cozy life simulation. Nintendo’s stock has risen in four straight trading sessions and was up 2.7% on Friday morning.
The strong debut helped reverse some of the losses Nintendo’s shares have incurred due to memory chip shortages since late last year. The company is vulnerable to surging memory prices, as they threaten both its margins on the new Switch 2 console and software purchases by players who have to buy increasingly expensive storage cards. Pokopia, a Switch 2 exclusive, is helping soothe investor worries by drawing in more fans and building the library of must-have games on the platform.
“Nobody anticipated this kind of success — no one expected such high quality,” said Tokyo-based analyst Serkan Toto. “It’s a very rare case of a Nintendo game accidentally ‘blowing up’. It’s the best-rated Pokémon game of all time.”
Nintendo’s rally is all the more notable given the broad downturn in global stocks amid worries over the Iran conflict and spiking oil prices. The company’s stock is up about 19% so far this week, putting it on track for its steepest weekly climb since July 2016. Yokohama-based Koei Tecmo Holdings Co, a co-developer on Pokopia, has like Nintendo outperformed the Nikkei 225 benchmark, gaining 4.5% since the game’s release.
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“If I didn’t have the Switch 2 already, I 100% would have bought it for this game,” said Isabelle Vansteenkiste, a 34-year-old translator and game enthusiast living in Tokyo. “I felt betrayed by the lack of good games for the Switch 2, but now I have hope for what Nintendo can offer.”
Pokopia extends a genre of stress-relieving simulation games that eschews combat, high scores or pressure to beat a clock. Its creators deliberately sought to create a world where progress is made slowly, bit by bit. Vansteenkiste, who played Animal Crossing: New Horizons extensively during the pandemic, equates the Pokopia experience to reuniting with an old friend.
“What we have seen over the last week is that a portion of investors feel the negativity around Nintendo’s stock has been overdone,” said Nick McKay, a senior video game analyst at Freedom Capital Markets. But he’s not yet ready to change his outlook for the Switch 2 console based on the new game’s initial sales. “We need to wait for a bigger number than 2.2 million to see whether this is actually a catalyst for long-term adoption of the Switch 2.”
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