Nintendo surges as markets catch onto Pokemon Go fever
Nintendo stock surged nearly 25% in Tokyo on Monday as the staged rollout of the Pokémon Go mobile game far surpassed most expectations, topping Apple's app charts in the US and Australia and reviving opinions of the Japanese gaming giant.
Nintendo owns a third of Pokémon Company, which along with Google spin-off Niantic Labs, makes Pokémon Go, a unique augmented reality (AU) app that involves users roaming the real world in order to hunt and find virtual Pokémon monsters using their phone's GPS mapping.
Pokémon Go has only been made available in a few countries so far but investors already seem to anticipate it being a colossal global success that could revive prospects for Nintendo, with the rash of articles and social media attention already indicating a highly compulsive game with appeal across age groups and to parents through its encouraging of pavement pounding walks around town looking for Pokéstops, 'gyms' and other in-game features - even for 40-year-old insomniacs getting caught up in 3am drug-deal mix-ups.
While the game is downloadable for free, if you want to get the extra PokéBalls you will need to catch roaming Pokémon, you will be encouraged to buy some Pokécoins, which you may also be tempted to spend on incense to attracts the monsters to your location, or even a Lucky Egg, which earns you double experience points (XP) for 30 minutes.
Importance for Nintendo
With the Japanese games and console group having historically focused heavily on exclusive first-party rather than third-party games for its computer consoles, which has been felt as the main reason why its Wii U handheld console has performed relatively badly up against the wider offering available on Sony's Playstation and Microsoft's Xbox, selling less than 10m so far compared to the original Wii selling 15m in its first full year.
Pokémon Go is the first Nintendo-exclusive game that the Japanese giant has granted a major mobile release, and industry specialists and financial analysts feel the success of this app could augur well for the company’s future.
In a recent note, broker Jefferies pointed out that ensuring mobile games succeed was pretty much the "only option left" for Nintendo as Wii-U is being phased out and Nintendo "doesn't have many places left to deploy its powerful and valuable IP" and "impeccable" track record with software.
In Jefferies analysts' view, chances of success for the new dedicated games platform, NX, "are very slim" and so "Nintendo must bring all its IP on to mobile platform and if current management dithers more, they risk losing approval votes needed for reappointment at subsequent AGMs."
The Pokémon effect sent Nintendo shares up 24.5% to 20,260 yen by close on Monday, having on Thursday and Friday also begun to accelerate away from the 15-month low of 13,920 yen last Wednesday.