Few companies are as synonymous with the medium of video games as Nintendo. In the decades since it entered the industry, hardly any companies have become as ingrained into gamer culture as the house of Mario, Zelda, Pokemon, and several other iconic franchises. But there are those who believe it can do much more with those franchises than just make more games, and they’re putting their money towards making that happen.

Reuters reports that investment firm ValueAct Capital Partners has recently acquired 2.6 million shares in Nintendo, following the investments it’s been making in the company since April 2019. With this latest acquisition, the firm now possesses a sizable stake of $1.1 billion, meaning it owns 2% of one of the largest gaming giants.

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It’s clear that the goal here is more than just reaping the rewards of Nintendo’s success. Being what’s known as an “activist investor,” ValueAct’s investments are meant to allow it to influence the company’s future. The firm made this even clearer in a note where it stated that, in addition to further growth in the gaming business, it sees the potential for Nintendo to expand into a “broader entertainment company.”

Nintendo would probably agree there, as recent years have already seen the company moving to branch off into other forms of entertainment. In addition to things like the live-action movie Pokemon: Detective Pikachu and Nintendo-themed Levis, Nintendo is also working on an animated Super Mario movie and Nintendo-themed areas at Universal Studios theme parks.

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Seeing an outside company make big investments in a major gaming company may bring up memories of Vivendi’s attempted hostile takeover of Ubisoft, but it doesn’t look like ValueAct has anything like that in mind. According to Reuters, the firm isn’t even attempting to get a seat within Nintendo’s board of directors. Instead, it's planning to work with the company “behind the scenes,” and both ValueAct and Nintendo have confirmed that they’ve been having discussions, but wouldn’t go into specifics beyond that.

Although it pointed out that Nintendo hasn’t seen the same kind of financial success in the past decade that companies like Activision and EA have, ValueAct is confident in the direction it’s heading in, as well as the advances it’s made with its digital services. To that end, it believes Nintendo has the potential to become “one of the largest digital media services in the world, in a category with the likes of Netflix, Disney+, Tencent Interactive Entertainment, and Apple Music.”

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Source: Reuters