Nintendo shares rose 5% after the company said its new title, Splatoon 3, broke domestic sales records.
The company said that sales of Splatoon 3 in Japan exceeded 3.45 million units— a domestic record for any Nintendo Switch within the first three days of sales.
The action game, which was released on September 9, was one of the most anticipated titles in Nintendo's lineup this year.
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The success of the title has eased fears of a slowdown in the industry after a pandemic-fueled boom that saw people spend more time at home playing games. Investors are also worried about the impact of a potential recession on the video game market. Gaming giants Nintendo, Microsoft and Sony all saw disappointing results in the second quarter.
However, Serkan Toto, CEO of Kantan Games, called Splatoon 3 a "cult hit" in Japan and said the recent slowdown in the gaming market is due to a lack of major titles.
"I'm not a big fan of the theory that the recession really put a dent in the video game industry. I think it's really been a drought of blockbusters," Toto told CNBC 's "Street Signs Asia . "
"I think it's true that people are attracted to these kinds of games, regardless of whether there's a recession on the horizon or not," he added.
The gaming industry continues to face a number of “headwinds,” including supply chain issues.
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However, the success of games like Splatoon 3 is helping to maintain the momentum of Nintendo's flagship Switch console, which is now over five years old, especially as the holiday season approaches.
Nintendo is also preparing to release new games in the popular Pokemon in November. Later on Tuesday, the company will hold a Nintendo Direct where it will reveal details about upcoming games.
Source: cnbc.com
