Tencent won approval from regulators to sell the Nintendo Switch in China, but analysts warned there are still more regulatory hurdles to overcome.
Nintendo shares surged more than 16% on Friday after Tencent won approval to start selling the Japanese gaming giant's Switch console in China.
Investors have been asking for a long time when Nintendo will enter the world's largest gaming market and the tie-up with Tencent will be a welcome step, according to Daniel Ahmad, an analyst at Niko Partners. But, he warned, the market should not get too excited because Nintendo and Tencent will still need approval from more regulators in the country.
Chinese consumers have typically favored computer and mobile games over consoles. That's because the government only lifted a 14-year ban on consoles in 2014. "The game portfolio is totally different from Sony and Microsoft, which appeal to hardcore gamers — who in China play on the PC. The Switch is a portable device, which fits nicely with Chinese users' penchant for gaming on the go," he added.
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