Super Nintendo? Shares Surges 27% On News Mario Is Going Mobile

Video game plumber brothers Mario and Luigi have become larger than life since Nintendo Nintendo introduced the characters as a part of a Donkey Kong game in 1981. Soon fans will see the duo in a new setting on their cellphones.

U.S. traded sharesof Nintendo Nintendo finishedthe trading day Tuesday up 27.5% at $18.22 (the companys American depository receipts, which trade over the counter in the U.S., climbed to $19.20 during trading). Gamers and investors in the U.S. woke up that day to two big announcements from the Japanesefirm. Theresultingpop was the largest one day gain for the gaming company since at least 1990 and puts the ADRup 40% year-to-date.

The ADR, which has an average daily volume of 33,756, moved 2.24 million shares on Tuesday. (Nintendo also trades in Tokyo. As of publication the Tokyo Stock Exchange was closed for the night.)

First came the news that Nintendo is joining forces with Japans DeNA, a mobilegame publisher, to bringSuper Mario and other Nintendo characters to an iPhone near you. The two companies will jointly develop and run new smartphone specific games featuring Nintendos intellectual property. In a statement Nintendo explained the move: Nintendo expects to benefit from new businessopportunities as more consumers encounter Nintendo IP, and DeNA expects to strengthen its core business ofmobile gaming internationally through the use of Nintendo IP.

(Photo By Jeff Daly/Invision for Nintendo/AP)

The companies commitment was cemented with Nintendo purchasing 22 billion yen of DeNA stock (about $181 million) and DeNA purchasing 22 billion yen of Nintendo. This amounts to10% of DeNA and 1.24% of Nintendo.

FORBES gaming contributor Erik Kain called the partnership earth-shattering. Kain reported that Nintendo President Satoru Iwata told reporters, This will allow us to build a bridge between smart devices and gaming consoles. It doesnt mean smart devices will eat away at gaming consoles, it will create an entirely new type of demand. In what appears to be an attempt to preemptively assuage fears it is abandoning its core hardware business, Nintendo announced it is working on a new platform called the NX.

Nintendo is, of course, years behind the packon mobile gaming. Following Tuesdays win and fresh 52-week high the ADRis still down 70% from October2007 when it hit an all time high over $77 a share. That said it may be too late the party. Mobile first gaming companies Zynga (of FarmVille and Words with Friends fame)and Kind Digital (Candy Crush) are both down more than 20% from their initial public offerings.Zynga closed at $2.62 Tuesday down 82% from its peak.

ZNGA data by YCharts

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Super Nintendo? Shares Surges 27% On News Mario Is Going Mobile