Saudi Arabia’s Public Investment Fund (PIF) has reduced its stake in Nintendo, despite previous reports suggesting an increase was under consideration. CNBC reports that a Japanese regulatory filing shows the PIF decreased its stake in Nintendo from 8.58% to 7.54%. The filing confirms that the PIF sold approximately 17.3 million shares between August 21 and October 1, marking a strategic adjustment in its holdings.
This move comes shortly after Saudi Prince Faisal bin Bandar bin Sultan al-Saud, vice chairman of PIF’s subsidiary Savvy Games Group, mentioned the possibility of raising their stake in Nintendo. His comments, made during an interview in late September, had led to speculation about an increased investment. However, the recent filing shows the opposite action.
Market Reaction and Nintendo’s Performance
Nintendo’s shares initially surged by 4.4% following the reports of a potential increase in PIF’s stake. The news from Kyodo News led investors to believe the sovereign wealth fund would continue its push in the gaming sector. However, the share price declined slightly once investors confirmed the reduction, although it remained relatively stable overall.
Nintendo has struggled recently due to slowing sales of its flagship Switch console. The company reported a 46% year-over-year drop in sales for the first fiscal quarter ending June 30, shipping only 2.1 million units compared to 3.91 million the previous year. This slowdown is attributed to market competition and the aging of the seven-year-old product.
Saudi Arabia’s Broader Gaming Investment Strategy
The PIF, with approximately $760 billion in assets under management, has been actively investing in global gaming companies as part of Saudi Arabia’s Vision 2030. The initiative aims to diversify the economy away from oil and develop an entertainment and gaming hub in the Middle East.
Besides Nintendo, the PIF holds stakes in other major gaming companies, including Capcom, Nexon, and Koei Tecmo. The fund also has a $1 billion stake in Sweden’s Embracer Group. Despite trimming its Nintendo holdings, PIF remains one of the company’s largest shareholders, reflecting its long-term investment strategy.