Nintendo shares surged more than 16% on Friday after Tencent won approval to start selling the Japanese gaming giant’s Switch console in China.
Chinese consumers have typically favored computer and mobile games over consoles. That’s because the government only lifted a 14-year ban on consoles in 2014.
While Microsoft and Sony haven’t built huge console businesses in China with the Xbox and PlayStation, Nintendo could have a better chance because of its game portfolio and the portable nature of the Switch.
“Nintendo sits on the gaming world’s most valuable and unique IP (intellectual property) treasure trove,” Serkan Toto, CEO of game industry consultancy Kantan Games, told CNBC.
“The game portfolio is totally different from Sony and Microsoft, which appeal to hardcore gamers — who in China play on the PC. The Switch is a portable device, which fits nicely with Chinese users’ penchant for gaming on the go,” he added.