Nintendo Shares Rise as Saudi Arabia Considers Increasing Stake

October 07, 2024 03:16 PM AEDT | By Team Kalkine Media

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Nintendo Shares Rise as Saudi Arabia Considers Increasing Stake — Image source: shutterstock

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Highlights

Nintendo shares surged 3.9% after Saudi Arabia expressed interest in increasing its stake.

Saudi Arabia’s Public Investment Fund (PIF) aims to expand its gaming industry investments.

PIF currently holds an 8.6% stake in Nintendo.

Nintendo Co. (TYO:7974) saw its shares rise by as much as 3.9% following news that Saudi Arabia’s Public Investment Fund (PIF) may be looking to increase its stake in the company. The move comes as part of Saudi Arabia's broader effort to expand its presence in the global gaming industry.

PIF's Expanding Interest in the Gaming Sector

Kyodo News reported that Saudi Arabia’s sovereign wealth fund is weighing the possibility of injecting more capital into Nintendo and other gaming companies in Japan. Prince Faisal bin Bandar, vice chairman of Savvy Games Group (a PIF subsidiary), indicated the fund’s willingness to explore this option with the cooperation of the companies involved.

This potential increase in investment aligns with the Saudi government’s strategy to diversify its economy beyond oil and establish itself as a key player in the global video game industry. The country has committed a significant $US38 billion (approximately $56 billion) to boost its gaming sector, targeting companies across Japan and Korea. The investment plan reflects Saudi Arabia’s focus on long-term growth in the gaming world, recognizing the unpredictable nature of hit-driven entertainment.

PIF's Current Stake and Broader Gaming Investments

As of the end of last year, PIF managed assets totaling $US760 billion and is already one of Nintendo’s largest shareholders, holding an 8.6% stake. This fund has also invested heavily in other major gaming and entertainment companies, including Tencent Holdings, Activision Blizzard (now part of Microsoft), and Kakao Entertainment. These moves are part of a broader strategy to establish Saudi Arabia as a central hub for the gaming and esports industries.

Nintendo’s stock movement reflects the growing global interest in the gaming sector, as large-scale investors like PIF continue to support companies with long-term potential in this rapidly evolving industry.

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