Nintendo solves one of its biggest issues of breaking into the China market by partnering with its biggest game publisher Tencent Holdings. Tencent now has the green light to distribute the Nintendo Switch on the mainland. Paving the way for the Japanese video game maker to bring its latest console to the world’s biggest gaming market.
The news comes from The Wall Street Journal that reported Nintendo submitted a request to the Chinese government for approval to sell its Switch console in China in collaboration with Tencent. The trade was approved Friday morning, causing a jump of 15% in Nintendo‘s shares.
The Japanese company has previously tried to enter the heavily regulated market through a joint venture. And why wouldn’t they – Chinese video game players, number a whopping 619.5 million. And as of 2018 US$37.9 billion on videogames last year (Newzoo). China had imposed a ban on foreign companies from selling game consoles in 2000 but lifted the ban in 2014. The reversal of the ban is expected to increase console players to 24.37 million by 2022.
“Nintendo must work with a partner to enter the China market, so it is no surprise that it has partnered with Tencent, the largest games company in the world, to distribute the Switch,” said Daniel Ahmad, an analyst with Niko Partner. Adding that bundling the console with a game is a common strategy to attract non-console centric players in China.