Pokemon Go Doubled Nintendo’s Market Value In Less Than Two Weeks
While you and everyone you know are out there on a large scale scavenger hunt for Pokemon characters, Nintendo's stock just keeps soaring. Thanks to the wild popularity of Pokemon Go, a free mobile game for smartphones that uses augmented reality to place fictional characters in real life locations, shares of Nintendo closed up 14 percent at 31,700 yen (around $298 in U.S. currency) on Tuesday. Nintendo's market capitalization has more than doubled to 4.5 trillion yen ($42.5 billion) since the game released on July 6.
The interesting thing about this is Nintendo isn't collecting hordes of cash from Pokemon Go players. It's a free app, and though there are in-game purchases, not all of that revenue goes to Nintendo. Some of it goes to Niantic, a San Franciso-based startup of which Nintendo is a partial owner, and of course The Pokemon Company, which Nintendo owns a 32.8 percent stake, gets it cut as well. Both Apple and Google also receive a share of revenue through their respective app stores.
It's not known yet exactly how much revenue from Pokemon Go ultimately trickles into Nintendo's pockets, but seeing how quickly the game has hooked its claws into the masses, investors are tripping over themselves to buy shares of Nintendo. It's not just about what's happening right now, but what's possible with Nintendo's other IP, especially if AR gaming has legs in the mobile world.
"Virtual reality and augmented reality have been a focus of the market but hardly anyone was expecting Nintendo in this area. Suddenly Nintendo has become an AR-related stock," a fund manager at a Japanese asset management firm told Reuters. "Under my rough estimate, the sales from Pokemon Go and upcoming related gadgets will boost net profits by 50 billion yen."
This is the best thing that could have happened to Nintendo, and it likely will pave the way for more iconic game characters to make the move the mobile. Nintendo had long been reluctant to embrace mobile gaming, but seeing the success of Pokemon Go might prove the motivation it needs to bring or license Super Mario, Donkey Kong, and other characters the mobile gaming scene.
The interesting thing about this is Nintendo isn't collecting hordes of cash from Pokemon Go players. It's a free app, and though there are in-game purchases, not all of that revenue goes to Nintendo. Some of it goes to Niantic, a San Franciso-based startup of which Nintendo is a partial owner, and of course The Pokemon Company, which Nintendo owns a 32.8 percent stake, gets it cut as well. Both Apple and Google also receive a share of revenue through their respective app stores.
It's not known yet exactly how much revenue from Pokemon Go ultimately trickles into Nintendo's pockets, but seeing how quickly the game has hooked its claws into the masses, investors are tripping over themselves to buy shares of Nintendo. It's not just about what's happening right now, but what's possible with Nintendo's other IP, especially if AR gaming has legs in the mobile world.
"Virtual reality and augmented reality have been a focus of the market but hardly anyone was expecting Nintendo in this area. Suddenly Nintendo has become an AR-related stock," a fund manager at a Japanese asset management firm told Reuters. "Under my rough estimate, the sales from Pokemon Go and upcoming related gadgets will boost net profits by 50 billion yen."
This is the best thing that could have happened to Nintendo, and it likely will pave the way for more iconic game characters to make the move the mobile. Nintendo had long been reluctant to embrace mobile gaming, but seeing the success of Pokemon Go might prove the motivation it needs to bring or license Super Mario, Donkey Kong, and other characters the mobile gaming scene.
