Nintendo Acquires A Movie Company: Are We Getting More Video Game Movies?

A leading video game company announced the acquisition of an animation studio that could further its plan to monetize its intellectual property. Here are the details.

What Happened: Gaming company Nintendo Co NTDOY announced the acquisition of animation studio Dynamo Pictures, according to a report from The Verge. The acquired company will be renamed Nintendo Pictures, with a planned closing date of October 2022.

The company said the acquisition will “focus on development of visual content using Nintendo intellectual property.”

The Verge highlights Dynamo Pictures being credited with work on video games like “Persona 5” and “Death Stranding.”

Related Link: 3 Stocks That Could Benefit From The Record Breaking Weeking Of 'Sonic The Hedgehog 2' 

Why It’s Important: Adaptations of video games into movies and television series has ramped up recently, and Nintendo has long been seen as one of the beneficiaries of the trend with a huge library of intellectual property.

The company partnered with Comcast Corp CMCSA unit Universal Pictures to create a new animated movie based on Super Mario. The movie was pushed back from a December 2022 release to spring of 2023. This marks the first theatrical Mario movie in nearly 30 years.

“Detective Pikachu,” which was the first live-action adaptation of a Nintendo video game since the 1993 “Super Mario Bros.”, was released in 2019.

Media companies have turned to video game franchises to create new movies and series.

Sony Group Corp SONY released “Uncharted” earlier this year. The video game adaptation posted a $44 million domestic box office opening weekend and grossed over $400 million worldwide.

“Sonic the Hedgehog 2” opened to $71 million domestically and grossed over $400 million worldwide. The movie came from Sega Sammy Holding SGAMY and Paramount Global Inc PARAPARAA.

The box office opening for “Sonic the Hedgehog 2” was the highest grossing opening for a video game adaptation ever. The success of “Uncharted” and “Sonic the Hedgehog 2” put video game adaptations into the spotlight again.

Streaming companies like Netflix Inc NFLX have also been ramping up adaptations of video games, as they come with already set plots and built-in fan bases.

Nintendo’s acquisition of an animation studio could mean it is pushing to develop its own movies and series based on its IP catalog. With a catalog that includes Mario, Donkey Kong, Zelda and Animal Crossing, Nintendo could see huge monetization opportunities.

NTDOY Price Action: Nintendo shares closed at $56.04 on Friday, versus a 52-week range of $51.91 to $72.13.