Nintendo stock jumps on Saudi fund's potential stake boost

Nintendo Co. shares climbed as much as 3.9% after reports surfaced that Saudi Arabia's Public Investment Fund (PIF) may increase its stakes in the Kyoto-based gaming giant and other Japanese video game companies.

The news, first reported by Kyodo News, followed comments from Prince Faisal bin Bandar, vice chairman of PIF’s subsidiary Savvy Games Group, who indicated that the fund is considering further investment in the sector with the support of the companies involved.

PIF, which manages assets of around $760 billion, is already one of Nintendo’s top shareholders, holding an 8.6% stake.

The sovereign wealth fund has made significant bets on the gaming industry as part of Saudi Arabia’s strategy to diversify its economy beyond oil, aiming to establish the kingdom as a global gaming hub.

The fund has also previously invested in other gaming and entertainment firms such as Tencent Holdings, Activision Blizzard (now under Microsoft), and Kakao Entertainment.

"It’s of note that the Saudis are doing this as part of national policy," said Ryoutarou Sawada, a senior analyst at Tokai Tokyo Intelligence Laboratory, according to a report by Bloomberg. "We expect this kind of interest to spread."

PIF’s potential investment in Nintendo is seen as aligned with the company’s goal of expanding its global audience.

Other gaming companies with Saudi investments also saw gains. Nexon Co. rose 3%, while Capcom Co. and Koei Tecmo Holdings Co. saw their shares rise 2% and 2.8%, respectively.

As part of Saudi Arabia's broader initiative, the country has been pushing to attract gaming and technology companies to the Middle East, investing billions in tourism and content creation.

This includes a theme park outside Riyadh featuring characters from the popular Japanese manga series Dragon Ball.