Japan's top ten companies

Frenzied buying of Nintendo shares has propelled the Kyoto-based games console maker’s market value to yen 10 trillion and won it a place among the top three most valuable companies in Japan.

Toyota, the world’s biggest car company, remains firmly in first place as Japan’s largest company, but the second place position of Mitsubishi UFJ Financial Group – the world’s biggest bank by assets – now looks vulnerable as Nintendo continues its relentless march higher.

And the rise of Nintendo has also sparked explosive share-price rises for companies that were, until a few weeks ago, moribund.

Last week Capcom, the company behind the enormously successful Monster Hunter series of games, said that the next instalment would appear exclusively on Nintendo’s Wii console. Since then, Capcom’s shares have leapt 23 per cent. A few years ago, Capcom’s shares were savaged after the company said that another of its titles, Resident Evil, would exclusively appear on the Wii’s ill-fated predecessor, the Game Cube.

Brokers said yesterday that, on the basis of what had happened to Capcom’s stock, other Japanese games studios were likely to follow suit. Numerous titles that have previously been developed exclusively for Sony’s Playstation2 console are now likely to find their next installments appearing exclusively for Nintendo.

Nintendo’s stock soared on Monday to more than Y70,000 per share. Analysts at CLSA recently said that a realistic price- target for Nintendo was Y100,000 – a value which, if hit, would take Nintendo ahead of MUFG.

Nintendo is already worth 80 per cent more than Sony – a company which still has a far higher share of the video games market, and has overall group revenues that are eight times those of Nintendo’s.

Monday’s 4.6 per cent surge in Nintendo’s share price came as investors piled cash into the growth story of the Wii, the games console released this time last year that has already succeeded in expanding the games-playing population to encompass more women and more people above the age of 30.

Last week it unveiled the launch-date and price for Wii Fit – a fitness game that uses a floor-based sensor device – the Wii “board” that looks like a set of bathroom scales and detects the body movements of the person standing on it. Analysts believe that the add-on will, for at least a year, be instantly sold-out at stores across the globe: each unit uses a few basic components and is expected to deliver profit margins of about 50% to Nintendo.

Although Nintendo has developed a fitness game as the first application for the Wii board, third-party developers are understood to be looking at a range of other possibilities that include a realistic golf simulator.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts