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Nintendo’s Market Gamble As They Split Stock To Make Money

The gaming legend has split its stock 10 for one in a potentially lucrative restructuring

Nintendo is a household name that needs no introduction, and like many such names in the tech and gaming world, it’s one that’s seen heavy investment in public trading.

This has come at a cost however, as while Nintendo’s stock price has risen its put Nintendo stock beyond the reach of fans more familiar with picking up a joystick than a stock option. This looks set to change as Nintendo has split their stock, reducing overall value but – the company hopes – making it more attractive to new investors.

Nintendo is not the first company in the broader tech field to split their stocks. It’s quite the done thing from time to time with Apple, Amazon, Alphabet, Microsoft and more all having outgrown their previous pricing.

However, Nintendo’s situation is unique in that Nintendo does not trade on the major American stock exchanges like the NYSE (New York Stock Exchange) or Nasdaq so this effort seems aimed squarely at their main investors in Japan, where younger traders are increasingly prevalent in the financial sphere.

Split-toon

Stock splitting is a simple mechanic, whereby increasing the number of shares available – effectively diluting the supply with more – allows more people to buy in at a lower price. Although this may seem like a bad deal for existing investors, it translates to more liquidity, meaning that those looking to sell will find more willing buyers, and those looking to hold will see more money flowing into the company.

Although for international Nintendo fans spurred on to invest, the fact that Nintendo only trades on the Tokyo and Osaka exchanges may prove to be a bit of a headache.

Nintendo stands as essentially the sole remaining player in traditional handheld gaming with its Switch and its forays into the mobile sphere, although facing mixed reception, have been strong in many cases. Successes include Mario Kart Tour, which recently reported $300m in revenue as of its third anniversary, and Fire Emblem: Heroes which joined the unicorn (mobile games making over a billion in revenue) club back in June when it reported more than $1b in revenue as of June.

There’s been some suggestion that this split may also be a vote of confidence, or precede some large-scale effort that could see significant buzz and thus further investment.

Certainly, following up the Switch (released over five years ago) with another smash-hit console must be high on Nintendo’s upcoming ‘to do’s…

With more shares available and a potential new investment windfall on the way, there’ll certainly be more than a few eyes on what Nintendo does next.

Written By

Daniel Griffiths is a veteran journalist who has worked on some of the world's biggest entertainment, home and tech media brands. He's reviewed all the greats, interviewed countless big names, and reported on thousands of releases in the fields of video games, music, movies, tech, gadgets, home improvement, self build, interiors, garden design and more. He’s the ex-Editor of PSM3, GamesMaster, Future Music and ex-Group Editor-in-Chief of Electronic Musician, Guitarist, Guitar World, Computer Music and more. He renovates property and writes fun things for great websites.

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