Photo courtesy = Nintendo homepage capture
Even if time for outdoor activities increases due to the endemic effect and the economy deteriorates in the aftermath of interest rate hikes, well-made games sell well. ‘Hogwarts Legacy’, ‘Diablo 4’, and ‘The Legend of Zelda: The Kingdom of Tears’, which were released this year, have sold more than 10 million copies, and this has led to good results from game companies developing them.
Nintendo is a game company that holds a number of prominent intellectual property rights (IP) such as ‘Mario’, ‘Pokemon’, ‘Zelda’, and ‘Animal Crossing’. Mario Kart 8 Deluxe, the best-selling Mario IP, has sold 55.46 million copies, and Animal Crossing’s representative work, Animal Crossing, has sold 42.79 million copies. In particular, Zelda’s successor, ‘The Legend of Zelda: The Kingdom of Tears’, released in May, sold over 10 million copies in just three days after its release, recording the fastest box office success among all Nintendo games.
Showing the power of its IP through sales performance, Nintendo’s game sales in the second quarter soared 51% compared to the previous quarter, and console sales increased 28%. Game sales increased by about KRW 1.3473 trillion compared to the previous quarter. Considering that ‘Zelda’ was the only major release in the first half, it is estimated that ‘Zelda’ was decisive.
Nintendo has the level of development to receive a score of 96 on Metacritic with ‘The Legend of Zelda: The Kingdom of Tears’, but its main competitiveness is that it has as much loyalty to IP as it does with development power. ‘Pokemon Scarlet Violet’ received a harsh evaluation with a score of 72 on Metacritic, but at the time it showed the fastest sales record among all Nintendo games, proving customer loyalty to Pokemon.
Nintendo, which had great success with Zelda in the first half, is about to release a new Mario game in the second half. ‘Super Mario Bros. Wonder’, scheduled to be released in October, is a 2D Mario series that appears after 11 years. You can expect results. The Mario movie recorded global box office sales of 1.8 trillion won and has maintained its No. 1 position in the global box office so far this year.
Nintendo’s mobile and IP-related sales in the second quarter grew by 190% compared to the previous quarter, and purchases of Mario games in particular increased significantly. This case suggests that revenue does not end with simple video content sales, and a virtuous cycle of sales will be established by expanding sales of games and consoles to be released in the future.
In addition, DLC (downloadable content) for ‘Pokemon Scarlet and Violet’ and a remake of ‘Supa Mario RPG’ released in 1996 are scheduled to be released in 2H, which are expected to have a positive impact on earnings and share price. The more difficult the economic environment, the more important the IP is, so Nintendo deserves attention because of its strong development capabilities and IP royalties.
Chung Eui-hoon, senior researcher at Eugene Investment & Securities
