When Arena of Valor was announced for the Switch in last week's Direct, we think it's fair to say that a number reading these pages simply shrugged. A free-to-play MOBA that made its name on mobile heading to the Switch as a Beta this year, it arguably wasn't among the biggest announcements in the broadcast from a fan's perspective.
However, in terms of share value, investors and a potential impact on Nintendo's future business, it was comfortably the most significant announcement. We looked at Nintendo's share value today and saw it had climbed a whopping 7.06% to 40,950 Yen when the markets closed in Tokyo. That's the highest it's been in nine years, a rather extraordinary statistic.

The share value has been trending high all year, but the image for the past month, below, gives you an idea of the size of the spike.

The reason Arena of Valor matters is that it's published by Tencent, and that Arena of Valor is actually one of the most popular games on smart devices in China, except there it's called Honor of Kings. According to some metrics and estimates it was the top grossing game in China during the second quarter of this year.
In analysis on The Wall Street Journal (paywall), this is highlighted as a potential starting point that could see Nintendo and Tencent work together on the Chinese market. This could mean publishing Nintendo's smart device games in China and perhaps releasing the Switch itself in the country, with WSJ citing "people familiar with the thinking of Nintendo and Tencent executives". Though Sony and Microsoft have taken their systems to China with limited success, the portable and tablet form of the Switch could favour it in the smart device-focused Chinese market.
The announcement of Arena of Valor for Switch is also seen as a move by Tencent to boost its presence in the West. It's the possibility of Nintendo's smart device apps (like Super Mario Run and Fire Emblem Heroes) in China that has investors buzzing, however. Though it's a tough market to penetrate, the revenues that success can bring in China could be a huge boost to Nintendo.
It is worth noting that Nintendo has released systems in China before with the iQue brand - these have included a plug-and-play Nintendo 64 and various portables based on the likes of DS and 3DS; they've all been limited devices with only a small number of games included.
It'll be interesting to see if Nintendo can make a breakthrough in China with the Switch and its smart device games; the very prospect of that success certainly has investors excited.
[source wsj.com, via bloomberg.com]
Comments 41
6 months in and I'm still not used to all this good news about Nintendo.
It's good to see them doing well.
Oh sorry, wasn't I supposed to say something NEGATIVE? Boo!
Nintendo will Break the Great Wall of China by Nintendo Switch invasion.
If only it wasn't something quite as derivative that spiked their shareprice.
@JHDK well just read the comments or go on the wider net to see the bashing is still as loud as ever. Its just we have good news to drown it out.
But I agree...this is weird. Its neverending negativity
I had become so accustomed to doom and gloom during the Wii U years that I'm still taken aback by articles like this.
If they can kick down the doors to China that can only mean good things. That's an absolutely massive market.
I wouldn't mind seeing more MOBAs on Switch like Smite.
Funny enough I was looking up Arena of Valor to see what its about and I seen they're also apparently getting DC Characters with Batman being an Assassin type character
Didn't tencent have something to do with the king's avatar (Chinese anime)? I would love it if they brought an mmo like that to switch!
I read an article a couple years back saying Nintendo could run a deficit for 38 years before dying. Looks like we need up that to 48 years. Absolutely swimming in cash right now.
If Nintendo ever wants to break into the Chinese market, having Arena of Valor at launch will help a lot.
@JHDK Don't worry, tomorriw there will be another "Nintendo is doomed" article or five to make things right
@JHDK
Soon or later, Nintendo will dominate gaming market. Just remember that.
If investors see the headline "World's biggest games company* brings latest megahit to Switch," it starts to make more sense. Shows how isolated we are as western gamers from the Asian games business market.
*(By many counts, Tencent is the biggest games company in the world. E.g. https://newzoo.com/insights/rankings/top-25-companies-game-revenues/).
(Edit: removed a bunch of stuff after I actually read the article & realised I was just repeating what was already said).
@BLP_Software I'd say balance is the keyword here.
On account of the game itself, I'm very curious how it'll work on the Switch.
That's really great news! They might easily make many millions in China alone!
I have zero interest in MOBAs myself, but I understand the importance of something like this.
If this goes well and Nintendo builds trust with Tencent, I can only imagine how fantastic that would be for pretty much everyone.
Has anyone played this Arena of Valor game? Is it any good?
Well, GO NINTENDO!
You can do it! (Adam Sandler Movies gif).
And suddenly those lifetime sales projections for Switch are that much more plausible...
Ironic given Japan and China are neighbors with close economic ties yet no Nintendo products there. Chinese gamers missed out on NES, SNES so the right thing to do is to release the Classic Edition consoles there. They have so much catching up to do with so many unreleased games there. It's baffling why Nintendo didn't bring the NES to China in the 80s when it was released internationally. They manufactured so many Nintendo consoles in China but never bothered to release them there.
@westman98 The Chinese market may be a pain, but I imagine any of the big 3 must salivate at the potential.
I'm looking forward to the Beta come winter.
I... I still can't believe the family-friendly Nintendo can't get into China, while SONY and MS have done that years ago........ :/
@SLIGEACH_EIRE That wasn't nearly negative enough for you, you must be having a bad day which has inverse property of making your comments sound positive!
@Don You are aware of the fact that China in the '80s and '90s (and several decades before that) wasn't exactly, you know... a market you could just release your products in, right?
Knowing when to sell is the key though...
The size of Chinese market is staggering, even more so in the gaming industry..
Quoting from Wikipedia:
In June 2017, the analysis company APP Annie reported that King of Glory was the number 1 mobile game (excluding Android games) in the world in terms of income generation, with first quarter revenue of the game reaching US $1.76 billion. A hero skin of Zhao Yun also had sold for $22 million in one day. At the time, Tencent reported 200 million registered users with 50 million daily active users.
$1.76 billion of IAP dominated revenue in a single quarter is insane, it's literally printing money for Tencent.
In comparison, Nintendo reported 489.1B JPY in revenue for the entire FY2017, that's $4.39B so just about $1.1 billion per quarter on average. And needless to say the differences in margin between IAP and hardware sales are enormous..
It'll be absolutely huge for Nintendo if they can land a healthy and successful relationship with Tencent, so 7% jump in the share price based on merely speculations is totally understandable
The Chinese market is a very lucrative one to really capitalize on. One of my cousins plays Overwatch like mad there, and last I've visited China (which was last year), gaming has been growing more and more.
TenCent is an absolute powerhouse. Personal interest aside it's nothing but great news for Nintendo. Hope Valo(u)r does well
Not interested in MOBA's, even less when they are Free to Play.
However, if this allows Nintendo to tap into new markets and sources of income, that could be used to fund or attract titles that I am interested in then I'm all for this game's success on the Switch.
@SLIGEACH_EIRE Nice one!
@Akropolon
I know that after China's economic reform in the late 70s many foreign companies established business in China. I think many Japanese cultural shows and manga were imported. It may be due to the low income of average people in China that Nintendo ignored the market but then it wouldn't have made sense for TVs and cars to be sold there since they cost more than video games.
Nope, Nintendo is doomed.
@Don
eh? china at the time of release of the snes in japan was sending out tanks to crush students.
and until 2006 japan made the nintendo consoles
@Akropolon
yes and it still has onerous restrictions on imports while exporting like a jeff bezos wet dream
@BLP_Software There's people who frequent this site who only see the 5-7th September section of the chart above.
Wow, what a single MOBA can do, being free to play, and distributed online. It's crazy that this alone nets 1.7 billion in a quarter and all of Nintendo's efforts net just 1.1 billion.
Good for Nintendo to realize that there is a genre of games out there attracting a huge market that Nintendo never catered to. A market that can make much more money for much less work.
The moba type of game is the craze in China, and if they can launch the Switch in China with an improved remake of the beloved superhit that is Honor of Kings aka Arena of Valor (that nowadays has 55+ million daily active users), there's millions of potential buyers.
Tencent buys stakes in all high profile mobile game developers. They are a force in the gaming business to reckon with.
They bought more than 80% of Supercell, the makers of mega-profitable games Clash of Clans and Hay Day and want to buy the rest of the shares.
Tencent also bought Riot Games, another well-known company responsible for a superhit called League of Legends.
They own 48% of Epic Games and 12% of Activision Blizzard shares.
Tencent is the biggest, most profitable online company in China.
Currently simply the best company to partner with getting a strong foothold in China.
The switch is already quite popular in China, I live in China and I bought my switch on Taobao as well as all of my games, they are really easy to get hold of also ( and a lot cheaper to buy), I got my switch with Zelda and a protective case and a screen protector for the same price as just the switch console in the U.K and that was a week after its release.
Also isn't Implosion made by a Chinese company? I could be wrong but when I bought it on Ipad I think it said it was made by a Chinese company.
✌️🍾🍾🍾🍾🍾🍾📊📊💰💰💰💰💰💰💸💸💵💵💵💵 this made me so happy. Stock almost $50 now. It was almost $10 at the Wii U downfall. Can the stock reach 60? 70? 80? 90? 100? Who knows when it will peak. Wii was over 80.
@RGnsd nah, as where i came from never heard of PS4 or Xbox 20years ago. Hebei province.
@Don Actually we had quiet good time with Nintendo products when i was young back then. But those console we had called "xiao ba wang" which is clone console of "family computer" which is FC or "Nintendo entertainment system" which is NES. And all those copy of clone FC or NES games. For example, we had 100 games in one card. LOL
Show Comments
Leave A Comment
Hold on there, you need to login to post a comment...