NTDOY Nintendo Co Ltd (PK)

By Takashi Mochizuki 

TOKYO -- Mario the plumber pulled off two global publicity coups within three weeks, taking a starring role at the Rio Olympic Games' closing ceremony and at Apple Inc.'s latest iPhone introduction.

Now comes what may be the mustachioed videogame hero's most difficult feat: boosting profit at the company that created the character, Nintendo Co.

The Kyoto-based videogame maker sent the creator of Mario, Shigeru Miyamoto, to Apple's event Wednesday in San Francisco, where he stood beside Apple Chief Executive Tim Cook and announced "Super Mario Run."

The free-to-download action game, to be released for Apple devices by December, has a flavor similar to that of the original console series and is optimized for smartphones. A version for Google parent Alphabet Inc.'s Android operating system is also planned.

On Thursday, Nintendo shares jumped 13% to Yen27,955 ($274.77) in Tokyo trading. Investors have long called on Nintendo to take its popular game franchises to smartphones as a way to cover declines in its console business. Nintendo has struggled to stay profitable in recent years.

The Mario smartphone game should bring in revenue quickly for Nintendo because players have to pay if they want to enjoy all of the game's levels. While Nintendo didn't release pricing plans, smartphone versions of popular console games from companies such as Square Enix Holdings Co. generally cost roughly $10 to $20.

Even more important is the publicity, because Nintendo is preparing to start selling a new console code-named NX by next March.

The willingness of Mr. Miyamoto, a legend among videogame fans, to appear on stage with the head of the company that is partly responsible for Nintendo's troubles shows how the Japanese company needs to expose its characters to consumers who aren't currently videogame devotees, and lure them to Nintendo game consoles and software.

In addition to casual clothing and a luxury watch featuring Nintendo characters, Nintendo has teamed up with Universal Parks & Resorts, a unit of Comcast Corp.

"Smartphone games, theme-park projects and all other character-licensing deals are just a marketing tool for Nintendo to let people become interested in its console games," said Hideki Yasuda, an analyst at Ace Research Institute.

The iPhone game announcement was the second surprise after the Summer Olympics closing ceremony, when Japanese Prime Minister Shinzo Abe appeared as Mario, popping up on a stage in the plumber's hat of the popular character.

The idea for Mr. Abe's stunt came not from Nintendo but from organizers of the 2020 Summer Games in Tokyo, said a spokeswoman for the organizing committee. She said the committee had "no idea" the iPhone game was in the works and simply chose Mario as a globally recognizable symbol of Japan.

The challenge now for Nintendo is leveraging all the attention into sales of the next-generation NX console, which it has said will go on sale by March. The company hasn't given any details on the NX, but people familiar with the matter say it is likely to be designed for use both as a living-room console hooked up to a television and as a portable device to carry around town. Analysts said they expect Nintendo to release NX details by early October.

Rivals are already beefing up their products ahead of the NX introduction. Around the same time Nintendo was touting its smartphone game on Wednesday, Sony was introducing a less-expensive version of its PlayStation 4 console for casual users and a high-end version for hard-core fans. Sony has sold more than 40 million units of the PlayStation 4, while Nintendo's Wii U, introduced a year before the PlayStation 4, has sold 13 million units so far.

Analysts said it would be difficult for Nintendo to take back market share because Sony and Microsoft Corp. tend to lock game players into their own systems by offering network-based services such as downloads of new games. Nintendo is trying something similar with an online community called My Nintendo.

In addition to the Mario game and a communications app called Miitomo that is already available, Nintendo and partner DeNA Co. plan to introduce two more smartphone games by March 2017, featuring Nintendo franchises "Animal Crossing" and "Fire Emblem." Nintendo's Mr. Miyamoto said previously that smartphone games would become an important revenue source for the company.

Tokyo-based game consultant Serkan Toto predicted "Super Mario Run" would generate at least one billion downloads globally. That would follow the success of Pokémon Go, a smartphone game developed by Google spinout Niantic Inc. and Nintendo affiliate Pokémon Co. On the Apple stage Wednesday, a Niantic executive said Pokémon Go has been downloaded more than 500 million times globally.

There are signs the Pokémon Go publicity has translated into sales of more traditional hardware and software. Sales in Japan of Nintendo's 3DS hand-held device and Pokémon games for the 3DS increased after the Pokémon Go hoopla, according to industry game data provider Famitsu.

Write to Takashi Mochizuki at takashi.mochizuki@wsj.com

(END) Dow Jones Newswires

September 09, 2016 02:48 ET (06:48 GMT)

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