Nintendo Is Finally Entering The Smartphone Gaming World

After years of aversion to mobile gaming, Nintendo Co., Ltd (ADR) NTDOY has changed its mind. The company announced on Tuesday that it has landed a partnership with DeNA Co., a Japanese game provider, to develop smartphone video games based on Nintendo’s classic characters, The Wall Street Journal reported.

The new partnership includes a cross-shareholding, with Nintendo taking a 10 percent stake in DeNA, worth roughly 22 billion yen ($181 million), and DeNA acquiring a 1.24 percent stake in Nintendo, for the same amount.

Nintendo will be in charge of developing the games, while DeNA will take care of the technical issues.

The new games will be only accessible through a game distribution portal to be launched this autumn.

Shares of Nintendo traded recently at $17.24, up 20 percent.

A Brief History Of Nintendo’s Stand Against Mobile Gaming

The company had been reluctant to entering the mobile gaming arena, concerned about undermining the value of its games portfolio. Instead, Nintendo was clinging to its traditional, console-based business model.

However, “that strategy has come at a steep cost, analysts say, because games played on smartphones, tablets and other portable gadgets are providing much of the industry’s growth,” WSJ stated.

Analysts insist on the fact that this is not a change to disregard. “This is about the most drastic, bold shift in strategy Nintendo could have undertaken,” Serkan Toto, a Japanese game consultant told WSJ.

Nintendo President Satoru Iwata explained the radical change: “By tapping into the smartphone we can increase the number of Nintendo fans (…) No company in any industry can survive if they fail to adjust to changing market environments.”