Shares in Nintendo powered up in Tokyo Wednesday on the news that the gaming company is making its blockbuster games available on smartphones.
"Finally, Nintendo has turned a corner and embraced a huge strategic shift," said Atul Goyal, analyst at global investment bank Jefferies, in a note published on Wednesday.
"[Nintendo's game characters] Mario, Zelda, Pokemon and Donkey Kong on smartphones and tablets will expand its market and profit pool dramatically," he said.
The Japanese console company, which once dominated the gaming market with Wii and DS console titles such as "Diddy Kong Racing" and "Legend of Zelda", Nintendo announced on Tuesday after market close that it had agreed with DeNA, a mobile game platform operator, to put Super Mario and other game characters on to smartphones by the end of this year.
Bids on the stock flooded in and the stock rose by the 21 percent limit, the daily limit set by the Tokyo Stock Exchange, to 17,080 yen ($140.83) on Wednesday – still a long way off the all-time 73,200 yen high it reached in November 2007.
"The news is positive" said Nomura analyst Junko Yamamura. "In view of the company's ample supply of intellectual property…the mobile games business will leverage Nintendo's content," she also said in her note published on Wednesday.
Blow away profits and banging praise
The move to mobile phone games is particularly welcome because Nintendo has failed to come up with a new hit console and has been running operating losses for three years in a row.
In the fiscal year 2015 that will end in March 2016, analysts expect the company to scrape in a profit, but only just: the median operating profit forecast is 29.18 billion yen on sales of 555 billion yen, or an operating profit margin of only one percent, according to Thomson Reuters data.