Shares of Japan-based Nintendo (JP:7974) gained 4.4% today after Kyodo News reported that Saudi Arabia’s Public Investment Fund (PIF) is eyeing a larger stake in Japanese gaming firms, including Nintendo. It was further reported that PIF is not hurrying to boost its stakes and any investments would be approached carefully.
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Nintendo is a video game company known for its iconic franchises, including Mario, Pokémon, and The Legend of Zelda.
Saudi Fund Sets Sights on Gaming Investments
Through this investment, the Saudi government aims to transform into a major player in the global gaming industry while diversifying its oil-dependent portfolio. It is investing $38 billion to establish the country as a video game hub. In particular, it is actively investing in Japanese and South Korean content providers. Additionally, the higher investments come as a part of Saudi Arabia’s national policy to boost tourism and attract gaming and tech companies to open offices in the Middle East.
PIF currently holds an 8.58% stake in Nintendo and is among the top shareholders. It also has investments in other Japanese players like Capcom (JP:9697), Koei Tecmo (JP:3635), and South Korea’s Nexon (JP:3659).
According to analyst Tomoaki Kawasaki from Iwaicosmo Securities, a larger stake held by the Saudi wealth fund in Nintendo aligns with the company’s goal of expanding its global player base. Additionally, enhanced relations with Saudi Arabia could lead to new growth opportunities for the company in this region.
Is Nintendo a Buy or Sell?
Overall, 7974 stock has a Moderate Buy consensus rating based on four Buys, one Hold, and one Sell assigned in the last three months. At ¥8,925.76, the average Nintendo share price target implies 15.3% upside potential.
