Super Mario Shows Nintendo How to Level Up at the Movies

The success of “The Super Mario Bros. Movie” has demonstrated the value of Nintendo’s game franchises. But the Japanese company needs to make much better use of them to level up for investors.

A new movie featuring Nintendo’s iconic plumber has hit a high score. It grossed $377 million globally in its first five days in theaters, making it the largest opening weekend ever for an animated movie, surpassing


“Frozen 2.” The latter eventually went on to rack up $1.5 billion in box-office revenues globally. And “The Super Mario Bros. Movie” will likely see another spike in box-office earnings when the film launches in its home country of Japan later in April.

Nintendo’s shares jumped 4% this week on the news. Assuming an eventual box office of $1.5 billion, Jefferies analysts estimate that the movie could bring in $350 million of operating income for Nintendo, after accounting for costs and profit-sharing with its partners. That would be a nice boost: Nintendo’s operating profit for the fiscal year that ended in March 2023 was probably around $3.8 billion, according to S&P Global Market Intelligence.

But whether the hit will be a game changer for Nintendo depends on if the company seizes the opportunity to make the most out of many more of its popular game franchises and doesn’t just take “Mario Bros.” as a one-off win. Nintendo currently makes almost all of its revenue from selling Switch videogame consoles and console games. Mobile games and other intellectual-property-related income—like royalties—only accounted for 3% of its sales in the nine months ending last December.

Nintendo’s popular titles would likely resonate strongly with families as broader franchises, particularly since some current parents grew up playing the company’s games. The trend of using videogames as fodder for other media formats is already well established: The success of


“The Last of Us” as an HBO television series is the latest example.

Creating new revenue sources would be especially helpful since Nintendo’s Switch console is starting to show its age, six years after its launch. Nintendo has sold 122 million of the consoles, but it will soon need a successor: Sales have been slowing of late.

Still, investors shouldn’t take for granted that Nintendo will pursue such a strategy. There were high hopes for mobile games as a new revenue driver a few years back, especially after the breakout success of “Pokémon Go,” but that turned out to be wishful thinking. Nintendo stuck to its console-first strategy.

“The Super Mario Bros. Movie” shows that Nintendo’s game franchises have huge potential outside the console. But Nintendo has been conservative about shifting away from its core bread and butter in the past. Investors would be wise to wait and see, rather than assuming Mario Bros. will usher in a new era.

Write to Jacky Wong at [email protected]

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