Bloomberg News

Sony, Nintendo Rise on Report China May End Game-Console Ban

January 28, 2013

Sony, Nintendo Rise on Report China May End Game-Console Ban

A child takes a photograph of fishes in a water tank using a Nintendo Co. 3DS handheld game console outside the Sony Corp. showroom at the Ginza district of Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

Sony Corp. (6758) and Nintendo Co. (7974), Japan’s biggest makers of gaming devices, rose after China Daily said the world’s most-populous country may end a 12-year ban on the sale of video-game consoles.

Sony, the maker of PlayStation machines, jumped 9.1 percent in Tokyo trading to 1,407 yen, highest since April 2012. Nintendo, the creator of Super Mario, added 3.4 percent to 9,630 yen, the highest since Dec. 7, in Osaka.

China banned the consoles in 2000 because of concerns about the potential harm to the physical and mental development of young people. The Ministry of Culture is now holding discussions with other departments about potentially ending the ban, the state-run China Daily newspaper reported today, citing a person it didn’t identify.

“Investors are welcoming the report,” said Mitsuo Shimizu, a Tokyo-based analyst at Iwai Cosmo Holdings Inc. (8707) “It would open up a new and huge market for the video-game makers.”

Nintendo, Sony and other Japanese companies have also benefited from the yen’s decline to the weakest in 2 1/2 years against the dollar, Shimizu said. A weaker currency boosts the repatriated value of Japanese exporters’ overseas earnings.

‘Promising Market’

The Chinese console ban was introduced by seven ministries in 2000, and all of them would need to agree to end it, China Daily said. A spokeswoman in the Ministry of Culture’s press office said it couldn’t immediately comment. She declined to give her name.

“Sony has always regarded China as a promising market for the game operation and has been studying and preparing for possible business opportunities,” Satoshi Fukuoka, a spokesman for Sony’s game unit, said today by phone. Sony has been in “constructive discussions” with regulators in China, he said, declining to elaborate.

Yasuhiro Minagawa, a spokesman for Nintendo, declined to comment. The Osaka-based company makes the Wii and Wii U consoles.

Game consoles are available in China through black-market retailers. Touchscreen computers and smartphones, such as Apple Inc. (AAPL:US)’s iPad and iPhone, are available legally.

Sony also was raised to buy at Bank of America’s Merrill Lynch because of the weaker yen and a turnaround in unprofitable businesses. Analyst Eiichi Katayama increased the bank’s target price to 1,850 yen from 980 yen.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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