Shares of Nintendo (NASDAQOTH: NTDOY) were up 13.6% as of 1:30 p.m. EDT Thursday after news emerged that the company's Switch gaming console will soon begin selling in China.
But Nintendo won't be selling the devices directly. According to a report from Reuters this morning citing a release from China's game-industry regulators, China-based tech giant Tencent (NASDAQOTH: TCEHY) received approval to distribute the Nintendo Switch console with a test version of the New Super Mario Bros. U Deluxe game installed.
Image source: Nintendo.
The move comes more than two years after the initial global launch (sans China) of Nintendo's Switch console. But entering the Middle Kingdom proved difficult for the Japanese video-gaming leader as it sought a partner to help navigate the country's complex array of regulatory restrictions.
On that note, perhaps it's no coincidence the Chinese government only recently lifted an extended freeze on approvals for new gaming titles that significantly impacted Tencent's own growth over the past year.
To be clear, Nintendo Switch's arrival in China isn't a sure thing just yet. According to the Chinese regulator's statement, Tencent's application has only been provisionally approved pending a comment period that ends on April 24, 2019. Assuming that day comes and goes without a hitch, however, it would open a massive new source of incremental growth for all parties involved.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tencent Holdings. The Motley Fool recommends Nintendo. The Motley Fool has a disclosure policy.