Nintendo Stock Price Jumps After Switch Game Announcement From Tencent

Nintendo's stock price jumped by more than 7 percent this week, apparently in response to the news that a game from Chinese internet giant Tencent in coming to Nintendo Switch. The company's multiplayer online game Arena of Valor was announced for Nintendo Switch during a Nintendo Direct and it's due out later this year.

Sources told The Wall Street Journal that investors are enthusiastic about the news because it "could be a precursor to arrangements allowing Nintendo to sell the Switch and its mobile games in China." China, of course, is a massive market for gaming, and if Nintendo can have success in the region, that could end up being a big bottom line-booster.

WSJ also reported that Nintendo has been "looking for ways to expand in China" and is considering Tencent as a potential partner, according to sources. The insiders said Nintendo thought about bringing the Wii U to China but walked away from this.

You can read the full WSJ report here.

Arena of Valor, which is known as Honor of Kings in other markets, is a free-to-play game. Youcan choose from 35 heroes, including roles like tank, mage, warrior, and assassin. A beta test version of the game will launch this winter.

After 15 years, China lifted its console ban in 2015. Sony (PlayStation 4) and Microsoft (Xbox One) brought their consoles to the country, but an issue that persists is that games must pass through China's Ministry of Culture to be approved for release.

There are reportedly more than 300 million gamers in China, so even if the number of releases is limited due to local rules, it's still undeniably a massive opportunity for game companies.