Photo: AFP

On Thursday it was announced that Chinese social media and gaming leader Tencent has won approval to sell Nintendo’s Switch console in China, the world’s largest video game market.

Following the news, shares of the Japanese game-maker surged by as much as more than 16% on Friday in Tokyo, before closing up just over 14%.

It has already taken two years for Nintendo to work through the regulatory hurdles needed to enter the market with its newest gaming system, and the approval announced this week only includes one title. Each game will have to win approval, individually, in order to be sold legally in the mainland China market.

While shares of Nintendo are now up more than 35% on the year, the news comes after Nintendo lowered its annual sales target for the Switch by 15%.

The Switch has fared well in the competitive console gaming environment, helping Nintendo solidify a top position alongside Microsoft and Sony. In the first 21 months since its release, the Switch was able to outpace its competitors in US sales to be the fastest selling console of this hardware generation.

Despite the strict regulations, which for years saw consoles banned outright, China is the world’s largest video game market, with total revenue from games reaching nearly US$38 billion last year.

But only a small fraction of that number is accounted for by consoles, with the vast majority of market share taken by mobile and PC games.

Nintendo has yet to release any of its mobile titles in China, and it is not clear whether the tie-up with Tencent – China’s largest mobile game publisher – could in the future help the Japanese firm tap that segment of the market.

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