Did Nintendo Just Say Checkmate to Disney?

Family-friendly movies used to be dominated by Disney (NYSE: DIS). However, there could now be a new entrant in the space that is growing to become a force at the animated box office, and its name is Nintendo (OTC: NTDOY). That's right, the maker of gaming hardware and owner of beloved family-friendly gaming franchises is expanding to the box office in a big way.

It just released its new Mario movie, the second in the series, which is on its way to a box-office performance of over $1 billion and a chance to set the all-time record for an animated film. In an industry long led by Disney, Nintendo appears to be gaining momentum. The Japanese gaming giant has even opened its own theme park in partnership with Universal Studios.

Did Nintendo just say checkmate to Disney? Here's what the encroachment on Disney's turf means for the two stocks, and which is the better buy today.

Box office animation might

Disney generated $6 billion in box-office revenue in 2025. With Nintendo's latest film dubbed The Super Mario Galaxy Movie, Nintendo may reach 20% of that with a single title this year. The second animated film from Nintendo and Illumination Studios could be the biggest movie of 2026, grossing over $400 million at the box office in its first week.

Nintendo plans to release a new movie from its treasure trove of franchises once a year going forward, with a live-action Zelda movie in the works for 2027. This is not nearly the pace of Disney's theatrical releases, but Nintendo could start to crowd out Disney from its box office dominance, which is one of the core pillars of its entertainment ecosystem.

On the other hand, Disney will struggle to compete directly with Nintendo, as it has never had much success in game development beyond licensing its intellectual property to third parties. Alongside theme park expansions in four cities around the world, Nintendo is slowly becoming a direct competitor to Disney.

Image source: Getty Images.

Reinforcing the gaming entertainment ecosystem

Nintendo is not going to make a huge amount of profit from a yearly movie release compared to its overall business. However, it can serve as a free marketing tool for its gaming hardware and game franchises, such as Mario, Zelda, and Animal Crossing.

The Nintendo Switch 2 was released in June 2025 and has already sold over 17 million units as of the end of 2025, making it one of the fastest-growing gaming devices of all time. Building these ancillary businesses in movies and theme parks can drive more people to buy Nintendo Switch devices for themselves or their kids, which is Nintendo's big moneymaker. A movie ticket may be $20, but a regular gaming customer could be worth $1,000 in revenue if you count hardware, game, and software subscription purchases over multiple years.

Nintendo's net revenue grew 99% year over year last quarter. With the Switch 2 just rounding into form and premier games in development as we speak, Nintendo is set to generate a boatload of profits in the years ahead. Nintendo's earnings peaked at over $5 billion during the pandemic. With price increases, a larger player base, and earnings from new business lines, I expect this figure to be surpassed within a few years, if not next year. At an enterprise value of $50 billion, this is a low price to pay for a high-quality business like Nintendo.

NTDOY Revenue (TTM) data by YCharts

Is Disney toast?

When looking at Disney, it, of course, would like Nintendo not to try to encroach on its dominance at the box office and in theme parks. But that doesn't mean the business is going away. In fact, after a decade of struggles, the company seems to be finally turning the corner with its streaming video transition.

Entertainment revenue was up 7% year over year last quarter, and experiences revenue (theme parks) grew 6% as well. Theme parks are the cash cow for Disney, driving $3.3 billion of the $4.6 billion in total segment operating earnings last quarter. Sports are in a tight spot, barely breaking even, and may face competitive pressure from other streaming giants going forward.

Overall, it looks like Nintendo has more momentum than Disney in expanding its entertainment empire, making it a better stock to buy today. But that does not mean Disney is going away tomorrow, or for a long time.

Brett Schafer has positions in Nintendo. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool recommends Nintendo. The Motley Fool has a disclosure policy.