Nintendo shares surge on Pokemon mobile game hopes

Pokemon Go shot to the top of the United States iTunes charts and will be released in Japan soon.

Shares of Japan’s Nintendo Co soared more than 20 percent after Friday’s surge, adding $7.5 billion to its market value in just two days, on hopes that strong sales of its new Pokemon GO videogame for smartphones will boost earnings. There are also media reports that Tencent Holdings (700.Hong Kong) is in talks with Nintendo to bring Pokemon GO to China.

Naoki Fujiwara, chief fund manager at Shinkin Asset Management, said that amid a shrinking home video game market, Nintendo’s smartphone games are highly valued by both domestic and foreign institutional investors as a stable revenue source. Pokemon Go is basically free of charge and it mainly targets younger players and not fervent game boys.

Is 15-20 billion yen monthly turnover doable? Its first mobile game, Miitomo, which was released in March, was seen as a disappointment.

OK, so the bar for Nintendo is set high, but at least it could be done.

Investors have been asking for Nintendo to go mobile each and every day in the past few years, and when the Japanese platform holder finally did it the outcome was awesome.

DeNA is not part of the Pokemon Go, analysts warn.

The true financial test will be the game’s launch in Japan, which accounted for 40 percent of the $30 billion spent on mobile gaming in the world previous year, according to Macquarie analyst David Gibson.