\n By Megan Cheah <\/p>\n
\n Shares of Japanese videogame maker Nintendo rose sharply as investors cheered more evidence of strong videogame software sales and signs of a brighter outlook for the profitability of its consoles. <\/p>\n
\n The Tokyo-listed stock climbed as much as 7.4% to 8,945 yen, equivalent to $56.08, on Friday before paring gains to 6.9%. It remains on track for its largest one-day percentage gain since March. <\/p>\n
\n On Thursday, Nintendo and Pokemon Co., which manages one of the Japanese company’s most popular franchises, Pokemon, said global sales of their Switch 2 game, “Pokemon Pokopia,” released in March, surpassed 5 million units across physical and digital versions in just over four months. <\/p>\n
\n Last week, Nintendo reported combined software sales of nearly 43.3 million units for the quarter ended June, a more than 30% increase from a year earlier. <\/p>\n
\n “This suggests that consumer appetite for buying games is increasing as they migrate to Switch 2, which is very encouraging,” said Kazunori Ito, Morningstar equity research director. <\/p>\n
\n He also views Nintendo’s shares as meaningfully undervalued. Morningstar has a fair-value estimate of Y12,000 on the stock. <\/p>\n
\n Besides strong game sales, the outlook for hardware profitability likely also contributed to the share-price advance, Ito said. Memory-chip prices have been surging amid the artificial-intelligence boom, posing a significant headwind to videogame-console makers. That has spurred Nintendo and its peers to raise console prices to protect product profit margins. <\/p>\n
\n The pace of memory-price increases has been slower than feared, Ito said, noting the signing of long-term supply agreements and planned production-capacity additions. These moves have likely made investors “more comfortable that memory prices may be approaching a ceiling,” he said. <\/p>\n
\n Ito said he expects Nintendo’s console profitability to improve from 2029 as memory prices come down. Together with the launch of more Switch 2-exclusive titles, Nintendo’s profit growth is likely to remain steady over the longer term, he said. <\/p>\n
\n Write to Megan Cheah at megan.cheah@wsj.com <\/p>\n
\n (END) Dow Jones Newswires<\/p>\n
\n August 14, 2026 03:18 ET (07:18 GMT)<\/p>\n
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