Is Nintendo Planning A Legend Of Zelda Smartphone Version?

Nintendo Co (T:7974). (OTC:NTDOY) is planning to launch its immensely popular franchise “The Legend of Zelda” on smartphones as per Investopedia, which quoted a Wall Street Journal report.

The Legend of Zelda is one of Nintendo’s most popular and successful franchises. The first game under this franchise was released in 1986 and since then, the company has released 18 more titles and reportedly, sold over 88 million copies so far.

The recent game The Legend of Zelda: Breath of the Wild has been a terrific success, leading to a surge in demand for Switch consoles, when the game was released in March, this year. The game has reportedly sold some 925K units for Switch and another 1.3 million in total in March alone.

Analysts observe that Nintendo was trying to protect its console business by not letting its well-known characters like Mario and Zelda appear on mobile platforms. However, mobile games started emerging as a lucrative business option as titles like Candy Crush and Angry Birds caught the imagination of the world.

Video games will generate a whopping $108.9 billion revenue in 2017, up 7.8% year over year, as per the latest report from Newzoo. Mobile games revenues will grow 19% to $46.1 billion, representing 42% of the total revenue. By 2020, more than 50% of revenues will come from mobile games.

After staying away from mobile gaming for long, Nintendo has highly started focusing on the said sector now. In fact, last year’s smash hit Pokémon Go gave it the much-needed impetus. Some of its other popular games launched for mobile platform include Super Mario Run and Fire Emblem Heroes. The Legend of Zelda is expected to get introduced after the release of “Animal Crossing” game.

We expect Nintendo to reap benefits from the fast growing mobile games market with The Legend of Zelda mobile game.

Currently, Nintendo carries a Zacks Rank #2 (Buy). We note that Nintendo has massively outperformed the Zacks Toys-Games-Hobbies industry in past year. While the stock returned 80.6%, the industry gained 34.8%.

Key Picks

Other stocks worth consideration in the broader technology space include DST Systems, Inc. (NYSE:DST) , Quantum Corp. (NYSE:QTM) and Alphabet Inc. (NASDAQ:GOOGL) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for DST Systems, Quantum Corp. and Alphabet is currently pegged at 10%, 20% and 16.6%, respectively.

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