Shares in the Japanese video game developer Nintendo saw a notable increase on Monday. This rise followed Saudi Arabia’s expression of interest in expanding its stake in the company, where it is one of the largest external investors.
The interest was articulated by Prince Faisal bin Bandar bin Sultan Al-Saud, vice chair of the Savvy Games Group, a gaming company owned by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF). He informed Japanese news agency Kyodo News of the PIF’s openness to increasing its investment in Nintendo and other Japanese video game companies.
Currently, the PIF holds an 8.58% stake in Nintendo, based on a corporate governance report filed in June. The fund also possesses shares in other Japanese developers such as Koei Tecmo and Capcom, as well as Korean company Nexon and U.S. developers Electronic Arts and Take-Two Interactive. Additionally, a subsidiary of the Mohammed bin Salman Foundation, linked to Saudi Arabia’s crown prince, owns a significant portion of Japanese game developer SNK.
The publication of Kyodo’s interview led to a 4% increase in Nintendo shares on Monday, marking a positive response in the market. Koei Tecmo shares rose by 3.6%, and Capcom shares increased by 2%.
To streamline efforts and create synergies, PIF is transferring its Japanese gaming company stakes to Savvy Games Group, according to Prince Faisal. He highlighted the potential for collaboration with Japanese companies to localize video games for additional markets.
PIF, managing over $700 billion in assets, is a crucial component of Saudi Arabia’s Vision 2030, an initiative aiming to diversify the nation’s economy beyond oil dependency. Video games constitute a central aspect of PIF’s investment strategy, with nearly $40 billion allocated to Savvy Games Group. This group is responsible for acquiring, developing, and publishing high-quality games, with Mohammed bin Salman serving as its chair.
Besides investments in gaming, the PIF is channeling resources into projects like the new airline Riyadh Air, the international golf series LIV Golf, and Qiddiya, an entertainment hub near Riyadh. Plans for Qiddiya include a Formula One track, a stadium, and a theme park based on the Japanese manga series Dragon Ball.
Currently, Nintendo is focusing on leveraging its intellectual property across other media platforms. The 2023 release of “The Super Mario Bros. Movie” achieved significant box office success, grossing $1.36 billion. The company is now developing a sequel to the movie and a new film based on the Legend of Zelda gaming series.
In its recent financial report, Nintendo disclosed a 46.5% year-on-year decline in revenue and a 55% drop in profit for the quarter ending June 2024, attributed to a deceleration in consumer purchases of video games. Nintendo has committed to launching an updated version of its Switch console, which is nearing eight years on the market, by April 2025.
