Video gaming company Nintendo is choosing San Francisco as the site of its first U.S. expansion in more than 20 years, offering a much-need boost for the city's retail market.
The maker of the Super Mario game franchise plans to open the new location in 2025, where it will join New York City as the only locations outside Japan, the company’s American division said in an annoucement Friday. Local officials are hoping the move signals a resurgence to the downtown shopping corridor that has been struggling with store closings.
“This is great news for Union Square and fans from everywhere,” Mayor London Breed wrote in a post on X, the social media platform formerly known as Twitter. “We’re excited for San Francisco’s future and look forward to welcoming this iconic brand to our city.”
Nintendo has not specified the exact location for its Union Square store, and the company did not respond to CoStar News’ requests to comment.
However, choosing San Francisco for its new location is probably due to the region's status as a national gaming hub, according to Nigel Hughes, senior director of market analytics at CoStar Group.
Companies like Roblox, Niantic, Twitch and Zynga are either headquartered or have large bases in the market. Game developer Niantic, for example, sited its home base at 1 Ferry Building overlooking the San Francisco waterfront. Nintendo also could've selected San Francisco due to the city’s popularity among tourists visiting the United States from Asian countries.
“San Francisco is the gateway to North America for much of the world, especially for Asia,” said Alex Sagues, first vice president at CBRE, and who was not involved with the expansion. “We are seeing strong tourism and foot traffic with historically high vacancy creating a lot of opportunity to lease space in the market.”
Locating Stores
Nintendo's first U.S. store — Nintendo New York — opened in 2001 and occupies a two-story, 10,000-square-foot store in the city's Rockefeller Center. Inside, guests can buy games, consoles and memorabilia, as well as play games at interactive stations. The gaming company also has three other stores in its home country: Nintendo Osaka, Nintendo Tokyo and Nintendo Kyoto.
The decision to expand in Union Square, San Francisco's commercial hub of upscale stores and hotels, comes at a time when the neighborhood is struggling to regain its footing following the effects of the COVID-19 pandemic.
Vacancy rates in the area hover around 20.8%, well above the 6.4% for greater San Francisco and the nationwide average of 4.1%, according to a CoStar analysis. Before the pandemic, Union Square posted vacancy rates around 6%.
In one of the biggest blows to Union Square, Macy's plans to close its longstanding flagship location as part of its nationwidel consolidation efforts. The 400,000-square-foot store has been open since the end of World War II, and it is one of 150 set for closing.
"The loss of population during the pandemic, then the loss of office workers and tourists, all reduced activity and retail spending," said Nigel Hughes. "And the appallingly bad perception caused by crime and drug abuse is keeping shoppers from returning."