Nintendo shares soar 18% with Super Mario game debut for Apple iPhone 7

Super Mario is finally coming to the iPhone.

Nintendo Co. will release Super Mario Run in Apple Inc.’s App Store in December, the first time the popular franchise is appearing on a smartphone. Shigeru Miyamoto, one of the creators of the original Mario game, gave a short demonstration of the game at Apple’s annual iPhone release event on Wednesday. A basic version of Super Mario Run will be free to download, but users will have to pay to play the entire game. The Kyoto-based company didn’t say when the app would be available for Android devices.

“It is a big deal,” Neil Campling, an analyst at Northern Trust Capital Markets, wrote in an e-mail. “This venture is perhaps the biggest endorsement we could possibly have imagined that Nintendo’s strategy to monetize their huge franchise IP on mobile and ex-platform reliant technology is the right one.”

Nintendo shares in Tokyo jumped as much as 18% to ¥29,200 in early trading, following a 29% jump in the company’s American depositary receipts in New York. The company said any anticipated impact from the new game is already included in its earnings forecast for the current fiscal period, and that Super Mario Run will also be introduced for Android-based devices. DeNA Co., the Japanese mobile-game developer, collaborated with Nintendo on Mario’s iPhone debut, and its stock climbed 21% to ¥3,390.

Nintendo has been slow to embrace smartphones, ignoring investors and fans who have clamored for years for its most popular characters to show up in mobile gaming. It’s only recently that the company has started to change its tune. The fact that Nintendo had such a high-level executive on stage to make the announcement shows that the game maker is serious about its mobile strategy, said Joost Van Dreunen, who runs SuperData Research, a research firm that tracks the gaming market.

“With Pokemon Go this summer, everybody has been going nuts—my guess is, they scratched their heads and decided: ‘we have to do this now,”’ Van Dreunen said. Rather than treating mobile as a cannibalizing platform, Nintendo will probably “create lite versions of games on mobile, call it advertising, and then get people to buy the device.”

Also Read: Apple launch event: Super Mario coming to the iPhone

After years of resisting making games for devices made by other companies, Nintendo announced a partnership with DeNA Co., a Japanese company. The two companies released their first app earlier this year, which became the most popular Android app in six countries and the most popular iPhone app in 10 countries soon after its release, according to the research firm App Annie. Just as quickly, it dropped from the top of the app charts.

Nintendo’s stock also temporarily skyrocketed this summer after the release of Pokemon Go, the most successful mobile game ever. But Nintendo shares plummeted as investors realized how little Nintendo would benefit from the Pokemon craze, given that it played only an indirect role in the app’s creation.

Pokemon Go’s success probably fast-tracked Nintendo’s expansion into mobile gaming and helped demonstrate how a household name can become an instant hit on smartphones. Mario is the biggest brand in e-gaming, having sold more than 500 million units, Campling said. This will also be the first time Nintendo is developing a smartphone game in-house, he said.

Mario also is different than Pokemon because Nintendo owns the entire franchise—the red-hatted character is its Mickey Mouse, Van Dreunen said. This also means that Nintendo will also have higher expectations for the new Apple iOS game’s contributions to revenue, he said. How sales will do, however, will depend on Nintendo’s monetization strategy, which is thus far unclear, he said.

Nintendo said it plans to release mobile games for its Animal Crossing and Fire Emblem franchises by March. Bloomberg

Also Read: Apple unveils iPhone 7; Pokemon Go coming to Apple Watch