CyberAgent soars on partnership with Nintendo for mobile games

[TOKYO] CyberAgent Inc jumped the most in more than four years after announcing a partnership with Nintendo Co to jointly develop smartphone games.

Shares of the Tokyo-based mobile game maker surged as much as 16 per cent in early trade, the most since November 2013. As part of the deal, Nintendo will take a 5 per cent stake in subsidiary Cygames Inc for an undisclosed sum, they said in a statement on Friday. Nintendo's existing mobile partner DeNA Co slumped as much as 5.7 per cent after the announcement.

The move is a shot in the arm for CyberAgent, one of Japan's most innovative and controversial mobile games developers. The company's aggressive tactics in monetising its games has given it cash to expand into other areas, including online television. For Nintendo, it's another push deeper into mobile gaming after lagging behind the rest of the segment for years. CyberAgent's shares were up 12 per cent to a record 5,950 yen as at 9.47am in Tokyo.

"Cygames is more international, more profitable and solely focused on game development than DeNA," said Serkan Toto, founder of Tokyo-based games consultancy Kantan Games Inc.

This summer, Nintendo will release a new role-playing title called Dragalia Lost, co-developed with Cygames, they said. The game will initially be available in Japan, Taiwan, Hong Kong and Macau. The new partnership hasn't been factored into CyberAgent's earnings forecasts, the company said. CyberAgent announced earnings Thursday that topped analysts' estimates.

Nintendo's outgoing President Tatsumi Kimishima has hinted that the three-year partnership with DeNA hasn't delivered as much as the company anticipated. They have jointly released three games - Super Mario Run, Fire Emblem Heroes and Animal Crossing: Pocket Camp - with mixed results.

"I had previously expected smartphone games to become one of our business pillars, but that's still an on-going issue," Kimishima said at a news conference on Thursday, after reporting earnings. Shares of Nintendo rose 2 per cent after profit topped estimates and a new president, Shuntaro Furukawa.

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