This Hour: Will "Super Mario Run" Boost Nintendo?

Nintendo's Super Mario Run game has arrived. It has come in the form of a digital download you can install on your smartphone. The question is, did it come with a bang, a bust, or with an ulterior motive?

Nintendo Co Ltd's 7974 (NTDOY) Mario smartphone title has set a download record. Nonetheless gamers have complained about the one-time cost of unlocking content, driving the Japanese game maker's stock price to a one-month low.

Super Mario Run achieved more than 40 million downloads just four days after its Dec.15 release in 150 countries on Apple Inc's (AAPL) App Store, becoming the first game to reach the milestone so quickly in App Store history, says Nintendo.

Nintendo shares have lost 13 percent since the launch, behind negative reviews from users mainly complaining about its US $9.99 one-time cost to open the game content, rather than the usual model of paying small amounts for special features. "Mario is arguably the most popular gaming franchise in the world, yet we see only about 8 percent of those who try the game actually purchasing it," says Sensor Tower analyst Spencer Gabriel.

It seems Nintendo decided to enter the smartphone gaming market after resisting initial pressure from shareholders concerned about that segment's threat to its core console gaming business. The primary reason for the procrastination may have been the fact that Pokemon GO also reached 25 million downloads in just 11 days with mixed results. Nintendo shares more than doubled in price after the release of Pokemon GO, achieving a six-year high. The stock then retreated from that high soon after the firm reported Pokemon GO would have little impact on profit.


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When deciding to expand into mobile, late president Satoru Iwata criticized titles that charged for rare in-game features which he said generated huge profit but also promoted addiction. He favored profit via low prices and a large user base. Some analysts have commented that the pricing may have been a ploy intended to maintain more interest in NTDOY gaming console business.

The digital gaming industry has become extremely lucrative. There is a possibility that this share price drop of NTDOY may be a buying opportunity in disguise. We will continue to monitor the reaction to the NTDOY stock price throughout the holiday season.


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World Markets

  • The Dow Jones Industrial Average .DJI lost 23.01 points, or -0.12 percent, to close at 19,918.95. The DJIA recorded its first two-day decline since Nov. 4.
  • The S&P 500 .SPX fell 4.22 points, or -0.19 percent, to 2,260.96
  • The Nasdaq Composite .IXIC retreated 24.01 points, or 0.44 percent, to 5,447.42.
  • MSCI's index of Asia-Pacific shares .MIAPJ0000PUS lost 0.8 percent with the Nikkei .N225 finishing 0.1 percent lower, having recorded a one-year high this week.
  • China's CSI 300 index .CSI300 continued to record losses to 0.5 percent, on track to lose 0.8 percent for the week.
  • Hong Kong's Hang Seng .HSI fell 0.5 percent, on a course to end the week down 0.5 percent.
  • Europe's STOXX 600 index closed down 0.2 percent on Thursday, with the broader downtrend countering optimism on hopes of a government bailout for troubled Italian lender Monte dei Paschi di Siena.

Commodities

Oil prices fell on Friday from low volume in Asian trading ahead of the Christmas and New Year holidays, eroding some of the gains in the previous session as traders took profits. Brent futures LCOc1 for February delivery dropped 22 cents, or -0.4 percent to US $54.83 a barrel at the time of this writing after ending the previous session up 1.1 percent. U.S. West Texas Intermediate crude CLc1 fell 26 cents, or -0.5 percent, to $52.69 a barrel after settling up 0.9 percent in the previous session.

"There's some profit taking after the last session's gains. Oil prices are also weaker due to the stronger dollar," said Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance.

Currencies

The dollar index .DXY was marginally lower on Friday but was still close to a 14-year peak of 103.65 earlier this week. It is currently recording a level of 102.98  or -0.11%. While the dollar rally has lost some steam, the euro held steady in the wake of plans to rescue Monte dei Paschi di Siena, Italy's second-biggest bank. The single currency European euro (EUR) hit a one-week high against the dollar, rebounding from a nearly 14-year low of US $1.0350 vs 1 EUR set on Tuesday. It was last up 0.1 percent at US $1.0429.

The euro was up 0.1 percent at 122.67 yen vs 1 EUR. The dollar was flat at 117.57 Japanese yen vs 1 US dollar (USD) after reaching as high as 118.66 yen a week ago, its strongest level against the Japanese currency since early February.